Optimal Input Mix

Essay

Optimal Input Mix. Electron Specialties, Inc. has designed an electric feeder cable that provides a throughput of 2,000 ampere hours (aH) per 24-hour period. If the diameter of the cable were increased by 1/2 inch, throughput would increase by 500 aH per day. Alternatively, throughput could be increased by 1,000 aH per day using the original cable diameter with an additional 100 mf of capacitance electronics designed by the firm.
A. Estimate the marginal rate of technical substitution between capacitance electronics and cable diameter.
B. Assuming the cost of additional capacitance electronics is $50 per mf and the cost of larger diameter cable is $20,000 per 1/2 inch, does the original design exhibit the property required for optimal input combinations? If so, why? If not, why not?