Mandy owns a small coffee shop. Her production function is q=2K0.5L where q is the number of cups of coffee produces, K is the number of coffee machines, and L is the number of employees. If K=10 and L=20, the marginal rate of technical substitution is: 1 MLP= 2K0.5 MLK = L/K0.5 MRTS= 2K/L = 2(10)/20 =1 MRTS = w/r Starting from 10 machines and 20 employees, if Joe hires one more employee, then he can use ______ fewer machine(s) and still produce the same quantity of coffee. 1 fewer machine

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Isocost and Isoprofit Curve Analysis

An isocost curve in the production theory that is a crucial part of economics depicts different combinations of factor inputs at a given market cost. In other words, this shows all the combinations of production factors that cost the same for the firm to employ. Usually, this can be depicted as a downward sloping straight line when the firms act as the price-takers in the factor markets. The slope of this mainly depicts the relative prices of different production factors.