To illustrate simultaneous equilibrium, we will consider a 2*2*2 model with two products (X and Y), two consumers (A and B) and two factors of production (L and K). The production possibility curve (PPC) will show the producer equilibrium. The PPC depicts efficient combinations of two goods (X and Y) that a firm can produce with...
- Post author:virenrehal
- Post published:August 3, 2022
- Post category:Microeconomics / Multi-product firms and simultaneous equilibrium / Theory of Costs, Production and Producer Equilibrium
Tags: consumer behaviour, marginal rate of substitution, Marginal rate of transformation, MRS, PPC, producer equilibrium