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A curve connecting the tangency points is called the expansion path because it shows how the input usages expand as the chosen level of output expands. In economics , an expansion path (also called a scale line [ 1 ] ) is a path connecting optimal input combinations as the scale of production expands. [ 2 ]
If a firm produces to the left of the contour line, then the firm is considered to be operating inefficiently, because they are not maximising use of their available resources. [6] A firm cannot produce to the right of the contour line unless they exceed their constraints. D) Production isoquant (strictly convex) and isocost curve (linear)
A firm's production function could exhibit different types of returns to scale in different ranges of output. Typically, there could be increasing returns at relatively low output levels, decreasing returns at relatively high output levels, and constant returns at some range of output levels between those extremes. [1]
The curve of fastest descent is not a straight or polygonal line (blue) but a cycloid (red).. In physics and mathematics, a brachistochrone curve (from Ancient Greek βράχιστος χρόνος (brákhistos khrónos) 'shortest time'), [1] or curve of fastest descent, is the one lying on the plane between a point A and a lower point B, where B is not directly below A, on which a bead slides ...
The theory of the firm consists of a number of economic theories that explain and predict the nature of the firm, company, or corporation, including its existence, behaviour, structure, and relationship to the market. [1] Firms are key drivers in economics, providing goods and services in return for monetary payments and rewards.
In economics and particularly in consumer choice theory, the income-consumption curve (also called income expansion path and income offer curve) is a curve in a graph in which the quantities of two goods are plotted on the two axes; the curve is the locus of points showing the consumption bundles chosen at each of various levels of income.
The springboard theory or springboard perspective is an international business theory that elucidates the unique motives, processes and behaviors of international expansion of emerging market multinational enterprises (EM MNEs). Springboard theory was developed by Luo and Tung (2007), [1] and has since been used to examine EM MNEs.
As such, general central bank behaviour is reflected through this i.e. raising the bank rate (short-term interest rates) in periods of rapid or unsustainable growth and vice versa. There is a final flow from monetary policy towards demand representing the impact of adjustments in nominal interest rates on real activity and subsequently inflation.