Explain the condition for optimum employment of two variable inputs. | Economics 2079

2079 10

Economics20795 marksOptimum employment of variable inputs

Explain the condition for optimum employment of two variable inputs. [5]

The condition for optimum employment of two variable inputs is based on the principle of equimarginal returns (also called the law of equimarginal utility in production context). For two variable inputs (say X and Y), optimum employment occurs when: $\frac{MPX}{PX} = \frac{MPY}{PY}$ Where: - MP...

The condition for optimum employment of two variable inputs is based on the principle of equimarginal returns (also called the law of equimarginal utility in production context). For two variable inputs (say X and Y), optimum employment occurs when: $$\frac{MPX}{PX} = \frac{MPY}{PY}$$ Where: - MP...

← PreviousAll questions Next question →

Up nextExplain the features of free market economy.

The condition for optimum employment of two variable inputs is based on the principle of equimarginal returns (also called the law of equimarginal utility in production context). For two variable inputs (say X and Y), optimum employment occurs when: $\frac{MPX}{PX} = \frac{MPY}{PY}$ Where: - MP...