Suppose this same firm could also produce 25 oak chairs each week with 6 units of Capital and 12 workers? Which method should it use to produce the 25 chairs? Since both methods produce the same number of chairs in the same period of time the answer is that a profit maximizing firm will choose the method which is cheapest.

    Are there other input combinations which could be used instead to produce 25 chairs? Almost certainly.

Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved