Question

how can minimum cost of production be achieved? and how does output respond to change on quantity of inputs? how does technology matter in reducing the cost of production, given the technology what happens to the rate of return when more plants are add to the firm?

Answer 1

The main objectives of the firm are to achieve profit the profit is achieved producing more goods with minimum cost.

The minimum cost achieved through following the ways.

• Increasing the productivity of the labors by increasing the marginal productivity by providing training.
• Technological invocation production process
• The encouragement to the research and development
• The good management system

2) The output of the firm increases by the reducing the cost of the production.

3) The technology play crucial role in the production of the goods it reduces the cost of the production and helps in producing the larger scale of the output.

The rate of the return of the firm increase when more plant are added and the firm can choose those plant which helps to produce an optimum size.