Ayushi posted an Question
August 26, 2020 • 02:14 am 30 points
  • UGC NET
  • Economics

19 producer's equilibrium will be achieved at a point where (1) mrts (marginal rate of technical substitution) and price ratio are equal to each other (2) mrts

19 Producer's equilibrium will be achieved at a point where (1) MRTS (Marginal Rate of Technical Substitution) and Price ratio are equal to each other (2) MRTS is greater than the price ratia (3 (4 MRTS is lesser than the price ratio The słopes of isoquant and isa-cost times are different.

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    Nidhi taparia best-answer

    Option (1) is right. Producer's equilibrium is when isocost line is tangent to isoquant or their slopes are equal. The slope of isocost line is the price ratio of factors and the slope of isoquant is the MRTS.

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