To calculate the firm's expansion path using calculus, we need to solve its:
A) quantity maximization problem.
B) cost minimization problem, with rental cost of capital R and wage W treated as variables.
C) cost minimization problem with quantity Q fixed.
D) cost minimization problem with quantity Q treated as variable.

Question

Quizplus · Accepted Answer

The expansion path is the locus of cost-minimizing input combinations for all levels of output. To find the expansion path, we need to solve the cost minimization problem with quantity Q treated as a variable.

To Calculate the Firm's Expansion Path Using Calculus, We Need