If capital is fixed, but a firm varies labor A. the firm stays on the same isoquant. B. the firm's output will be dependent on the marginal rate of technical substitution. C. the firm might move to a new isoquant, depending on how much labor is added. D. the firm moves to a new isoquant.

Question

Alvin Dunn

Business

24 August, 03:06

If capital is fixed, but a firm varies labor A. the firm stays on the same isoquant. B. the firm's output will be dependent on the marginal rate of technical substitution. C. the firm might move to a new isoquant, depending on how much labor is added. D. the firm moves to a new isoquant.

+2

Answers (1)

Know the Answer?

Ayana Mueller · Answer 1

The firm's output will be dependent on the marginal rate of technical substitution.

Explanation:

The marginal rate of technological replacement indicates how much production, like energy, can be supplemented by other inputs, including resources, without increasing the output level.

The graph isoquant or curve shows the different configurations of both inputs that contribute to the same output.

For example, the dL / dK calculations of the MRTS chart with capital (represented by K on the Ya xis and works (represented by L) on the X-axis. The shape of the isoquant depends on the exact replacement of input values, resulting in a straight line which produces an L structure. If the value of the input is not necessarily a substitute, the line will be angled.