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Figure 7A-1
-Suppose the producer in Figure 7A-1 wants to increase production of good y from 100 to 200 in the short run.Assume MP_L/MP_K and input prices remain constant.If point A represents the best possible combination of inputs for 100 units of output, which point represents the best input combination in the short run for 200 units of output?

Question

Use the following to answer questions :
Figure 7A-1

-Suppose the producer in Figure 7A-1 wants to increase production of good y from 100 to 200 in the short run.Assume MP_L/MP_K and input prices remain constant.If point A represents the best possible combination of inputs for 100 units of output, which point represents the best input combination in the short run for 200 units of output?

Quizplus · Accepted Answer

In the short run, the producer is limited by at least one fixed input, meaning they cannot adjust all inputs to achieve the most efficient scale of production for the new output level. Therefore, moving from point A to point B represents the best possible combination of inputs to increase production from 100 to 200 units, given the constraints of the short run where not all inputs can be optimally adjusted.

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