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With a linear production function there is a: Select one: A. perfect substitutable relationship between all...

With a linear production function there is a:

Select one:

A. perfect substitutable relationship between all inputs.

B. perfect complementary relationship between all inputs.

C. fixed-proportion relationship between all inputs.

D. variable-proportion relationship between all inputs.

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Answer #1

With a linear production function there is a:

A) perfect sustitutable relationship between all inputs.Reason: A linear production function is represented by a straight-line isoquant. The inputs required for a linear production function are perfect substitutes of each other. For example, if a firm requires 4 labours for production of a product and these 4 labours produce 50 products in 8 hours of time, but they can be replaced by 2 machines as they produce the same amount of products in 4 hours. so now the producer can either employ 4 more labours or get 2 machines and terminate the labourers. Both the inputs, labour and machines are perfect substitutes of each other, thus, here, the producer faces linear production function.

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