Abstract
This paper deals with determination of the optimal input path and optimal length of the production period for a large capital unit, say a ship. The effects of changes in price, wage rate and interest rate on the optimal input path and the optimal length of the production period are analyzed. The main results are that a higher price (lower wage rate) increases the use of labor and lowers the production time. A higher interest rate increases the labor input at the end of the production period, but other effects are ambiguous.
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