Question

Suppose a firm acts to minimize the cost of producing 170 units of output and determines this cost to be $26,000. Then, if the firm acts to maximize output for a total cost of $26,000, the maximum output attainable is

Answer 1

Answer :-

In this problem, we have to apply the assumptions of standard micro theory, which states that minimising cost is the dual problem maximizing output.

Therefore, the total unit of output is given as 170 units and the producer try to minimise cost to $26,000, at this cost the maximum units they can produce Will be only 170 units.

The main reason behind this is that, they minimize their total cost to $26000 and also want to maximize output to 170 units.