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Q. what will be exact answer if question is explain slope of demand curve (3 or 4 marks)
Q. long run production function. (3or 4 marks)
Q. long run production function. (3or 4 marks)
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Solution
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1) Slope of the demand curve is negative. Downward slope of demand curve indicates the negative relationship between quantity demanded of the good and the price. Slope of a demand curve measures the absolute change in commodity's price and quantity.
Slope of demand curve =
2) In long run, a firm can change all its inputs, which means that the output can be increased (decreased) by employing more (less) of both the inputs − variable and fixed factors. In the long run, all inputs (including capital) are variable and can be changed according to the required levels of output. The law that explains this long run concept is called returns to scale. The long run production function is expressed as
Q x = f (L, K)
Both L and K are variable and can be varied.
1) Slope of the demand curve is negative. Downward slope of demand curve indicates the negative relationship between quantity demanded of the good and the price. Slope of a demand curve measures the absolute change in commodity's price and quantity.
Slope of demand curve =
2) In long run, a firm can change all its inputs, which means that the output can be increased (decreased) by employing more (less) of both the inputs − variable and fixed factors. In the long run, all inputs (including capital) are variable and can be changed according to the required levels of output. The law that explains this long run concept is called returns to scale. The long run production function is expressed as
Q x = f (L, K)
Both L and K are variable and can be varied.
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