A competitive firm uses two variable factors to produce its output, with a production function q = min{x1, x2}. The price of factor 1 is £8 and the price of factor 2 is £5. Due to a lack of warehouse space, the company cannot use more than 10 units of x1. The firm must pay a fixed cost of £80 if it produces any positive amount but doesn't have to pay this cost if it produces no output. What is the smallest integer price that would make a firm willing to produce a positive amount? А. £44 В. £41 С. £29 D. £13 Е. £21
A competitive firm uses two variable factors to produce its output, with a production function q = min{x1, x2}. The price of factor 1 is £8 and the price of factor 2 is £5. Due to a lack of warehouse space, the company cannot use more than 10 units of x1. The firm must pay a fixed cost of £80 if it produces any positive amount but doesn't have to pay this cost if it produces no output. What is the smallest integer price that would make a firm willing to produce a positive amount? А. £44 В. £41 С. £29 D. £13 Е. £21
Chapter10: Cost Functions
Section: Chapter Questions
Problem 10.6P
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![A competitive firm uses two variable factors to produce its output, with a production function
q = min{x1, x2}. The price of factor 1 is £8 and the price of factor 2 is £5. Due to a lack of
warehouse space, the company cannot use more than 10 units of x1. The firm must pay a
fixed cost of £80 if it produces any positive amount but doesn't have to pay this cost if it
produces no output. What is the smallest integer price that would make a firm willing to
produce a positive amount?
А.
£44
В.
£41
С.
£29
D.
£13
Е.
£21](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1ef8933b-ec2b-463a-a7e8-4ee4bf5e2ebd%2Fbc443f1c-1d54-4d66-ba70-86f5929f03bf%2F66whs1r_processed.png&w=3840&q=75)
Transcribed Image Text:A competitive firm uses two variable factors to produce its output, with a production function
q = min{x1, x2}. The price of factor 1 is £8 and the price of factor 2 is £5. Due to a lack of
warehouse space, the company cannot use more than 10 units of x1. The firm must pay a
fixed cost of £80 if it produces any positive amount but doesn't have to pay this cost if it
produces no output. What is the smallest integer price that would make a firm willing to
produce a positive amount?
А.
£44
В.
£41
С.
£29
D.
£13
Е.
£21
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