1.2 Specification of technology • n 種の財（input にもoutput にもなる。） • the net output of good j : yj = yoj − yij • a production plan : y ∈ Rn • the firm’s production possibilities set : Y = {y ∈ Rn : y is technology feasible} ⊂ Rn • ”Immediately” feasible In the short run, some inputs of the firm are fixed. Assume that such restrictions can be described by some vector z ⊂ Rn. The restricted (or short-run) production possibilities set : Y(z) ⊂ Y • Input requirement set Suppose a firm produces only one output. the net output bundle can be written as (y, −x) where x is a vector of inputs that can produce y units of output. The input requirement set: V(y) = {x ∈ Rn + : (y, −x) ∈ Y} The input requirement set is the set of all input bundles that produce at least y units of output. • Isoquant Q(y) = {x ∈ Rn + : x ∈ V(y) and x y}. The isoquant gives all input bundles that produce exactly y units of output.
