Answer the following:
a)Consider a firm which produces baseball bats using wood and workers.On a graph with capital (wood)on the vertical axis and labor (workers)on the horizontal axis,draw an isoquant and isocost line such that the firm is minimizing the total cost of producing Q₁ baseball bats.Let this initial point be profit-maximizing.
b)Suppose forest fires cause the price of wood to rise.Trace the effects of this change on the firm's optimal combination of inputs.Will they now produce more or less than Q₁bats? Why?

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The Answer of Answer the following: a)Consider a firm which produces baseball bats using wood and workers.On a graph with capital (wood)on the vertical axis and labor (workers)on the horizontal axis,draw an isoquant and isocost line such that the firm is minimizing the total cost of producing Q₁ baseball bats.Let this initial point be profit-maximizing. b)Suppose forest fires cause the price of wood to rise.Trace the effects of this change on the firm's optimal combination of inputs.Will they now produce more or less than Q₁bats? Why?

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