2. For the following questions, suppose the firm has the production function f(x,x2) = x,2x/2. The market prices are p = 20, w, = 5, wz = 5, and input 2 is fixed at 2 = 1 %3D in the short-run. a. Find the short-run minimum cost function c,(y,&). (Hint: do not plug in the actual values for p, wl, etc.). b. Calculate VC, FC, AVC, AFC, AC, and MC for the short-run cost function you found in part b (Hint: now use p = 20, w, = 5, w, = 5, and &, = 1).
2. For the following questions, suppose the firm has the production function f(x,x2) = x,2x/2. The market prices are p = 20, w, = 5, wz = 5, and input 2 is fixed at 2 = 1 %3D in the short-run. a. Find the short-run minimum cost function c,(y,&). (Hint: do not plug in the actual values for p, wl, etc.). b. Calculate VC, FC, AVC, AFC, AC, and MC for the short-run cost function you found in part b (Hint: now use p = 20, w, = 5, w, = 5, and &, = 1).
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
3
![2. For the following questions, suppose the firm has the production function f(x1, X2) =
x,/2x/2, The market prices are p = 20, w, = 5, wz 5, and input 2 is fixed at 2 = 1
%3D
in the short-run.
a. Find the short-run minimum cost function c,(y, &2). (Hint: do not plug in the
actual values for p, wl, etc.).
b. Calculate VC, FC, AVC, AFC, AC, and MC for the short-run cost function you
found in part b (Hint: now use p= 20, w, = 5, w; = 5, and&, = 1).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1d0fdcc1-789f-487a-b9a6-3cd22fdf1b3e%2Fded7e610-6907-4dbc-81da-fc59dbe7b4cb%2Fj1vyg5c_processed.jpeg&w=3840&q=75)
Transcribed Image Text:2. For the following questions, suppose the firm has the production function f(x1, X2) =
x,/2x/2, The market prices are p = 20, w, = 5, wz 5, and input 2 is fixed at 2 = 1
%3D
in the short-run.
a. Find the short-run minimum cost function c,(y, &2). (Hint: do not plug in the
actual values for p, wl, etc.).
b. Calculate VC, FC, AVC, AFC, AC, and MC for the short-run cost function you
found in part b (Hint: now use p= 20, w, = 5, w; = 5, and&, = 1).
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