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The Equi-Marginal Principle can be applied to both consumption as well as production?
(b) Equi-marginal principle The equi-marginal principle was originally associated with consumption theory and the law is called 'the law of equi-marginal utility'. The law of equi-marginal utility states that a utility maximizing consumer distributes his consumption expenditure between various goods and services he/she consumes in such a way that the marginal utility derived from each unit of expenditure on various goods and services is the same. The pattern of consumer's expenditure maximizes a consumer's total utility. The law of equi-marginal principle has been applied to the allocation of resources between their alternative uses with a view to maximizing profit in case a firm carries out more than one business activity. This principle suggests that available resources (inputs) should be so allocated between the alternative options that the marginal productivity gain (MP) from the various activities are equalized. For example, suppose a firm has a total capital of Rs. 100 million which it has the option of spending on three projects, A, B, and C. Each of these projects requires a unit expenditure of Rs. 10 million. Suppose also that the marginal productivity schedule of each unit of expenditure on the three projects is given as shown in the following table. Units of Expenditure Marginal Productivity (MP) (Rs. 10 million) Project A Project B Project C 1st 501 403 354 2nd 452 305 306 3rd 357 208 209 4th 2010 10 15 5th 10 0 12 Going by the equi-marginal principle, the firm will allocate its total resource (Rs. 100 million) among the projects A, B and C in such a way that marginal product of each project is the same i.e., MpA = MPB = MPC. It can be seen from the above table that going, by this rule, the firm will spend 1st, 2nd, 7th, and 10th unit of finance on project A, 3rd, 5th, and 8th unit on Project B, and 4th, 6th, and 9th unit on project C. In all, it puts 4 units of its finances in project A, 3 units each in projects n and C. In other words, of the total finances of Rs. 100 million, a profit maximization firm would invest rs. 40 million in project A, Rs. 30 million each in projects B and C. This pattern of investment maximizes the form's productivity gains. No other pattern will ensure this objective. The equi-marginal principle suggests that a profit maximizing firms allocates MpA = MPB = MPC = … = MPN If cost of project (COP) varies from project to project, then resources are so allocated that MP per unit of COP is the same. That is, resources are are allocated in such proportions that The equi-marginal principle can be applied only where (i) firms have limited investible resources, (ii) resources have alternative uses, and (iii) the investment in various alternative uses is subject to diminishing marginal productivity or returns.
How much does a taxi cost from 42ND and 8TH to Central Park?
1,000,000,000$$
How much does an 1/8th of cocaine cost in state of Delaware?
250
Who commanded the 8th radio research unit in phu bai Vietnam in 1970?
In 1970, the 8th Radio Research Unit in Phu Bai, Vietnam, was commanded by Lieutenant Colonel William A. McClure. This unit played a crucial role in electronic warfare and intelligence gathering during the Vietnam War. McClure's leadership contributed to the unit's effectiveness in intercepting and analyzing enemy communications.
What units received the presidential unit citation in Iraq?
c battery 5th/8th fa
How much does a eighth of KB marijuana cost?
35-75 per 8th
SI unit is based on?
This is from my 8th grade science text book !!!! It is based on the number TEN (10)
What are the changes and updates to assault weapons in the 8th edition of the game?
In the 8th edition of the game, assault weapons have undergone changes and updates to their stats and abilities. These changes may include adjustments to damage output, range, accuracy, and special abilities that affect gameplay.
How many sq yards are there in one kanal?
A kanal is a unit equal to 1/8th of an acre, therefore 605 square yards
Which concentration camp did the 8th british artilary unit liberate?
I wonder if you are thinking of Bergen-Belsen, liberated by the 11th Armoured Division.
What is the horsepower of a 1989 mustang 5.0 gt?
220 horsepower for the high output 5.0 ( 302 cubic inch ) in a 1989 Ford Mustang ( the 8th " character " of the VIN is an " E " )
Where do you wear unit award on the dress blue uniform?
1/8th of an inch above the right breast pocket and centered on the pocket flap
