00:01
So here we have a firm and that firm is got a cost function, right? and that cost function, long run average total cost, looks something like this, right? i assume that this is a total cost function and we are producing, we are choosing q1, right? so q1 is at b.
00:25
Now we have a bunch of things to rule out and let's start with the easiest one, d.
00:32
Right? is at minimum efficient scale.
00:39
This is obviously wrong, right? this is clearly wrong because the minimum efficient scale is right here.
00:48
It's the minimum, it means that you've reached the minimum average cost.
00:54
So we are clearly at a higher cost, so we are not at the minimum efficient scale.
00:59
The other ones i'm arguing is that a and c are the same, right? the least cost rule in employing resources is the equal, is the same as marginal product per dollar's worth, right? those are the same thing.
01:17
Least cost implies that marginal product per dollar are equal because they're both cost minimization, right? they are both part of cost minimization and neither of these can be right as well because here you are cost minimizing...