a) Find the formula for the firm's isoquants, and sketch the isoquant for y = 16 in a diagram. D) Compute the firm's optimal input combination (x(16),x(16)), and illustrate it in your diagram in a). Explain your steps. What are the firm's costs of producing 16 units? =) Find the firm's cost function C(y). Explain what you are doing.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A company chooses the two inputs *1
duce its output y.
f(x1, x₂)
y =
and 2 to pro-
The production function is given as
1/2 1/2, and input prices are ₁ = 80 and
4x1x2
=
w220. The firm also has fixed costs of F = 100.
a) Find the formula for the firm's isoquants, and sketch the
isoquant for y = 16 in a diagram.
b) Compute the firm's optimal input combination
(x(16),x(16)), and illustrate it in your diagram in
a). Explain your steps. What are the firm's costs of
producing 16 units?
c) Find the firm's cost function C(y). Explain what you are
doing.
Transcribed Image Text:A company chooses the two inputs *1 duce its output y. f(x1, x₂) y = and 2 to pro- The production function is given as 1/2 1/2, and input prices are ₁ = 80 and 4x1x2 = w220. The firm also has fixed costs of F = 100. a) Find the formula for the firm's isoquants, and sketch the isoquant for y = 16 in a diagram. b) Compute the firm's optimal input combination (x(16),x(16)), and illustrate it in your diagram in a). Explain your steps. What are the firm's costs of producing 16 units? c) Find the firm's cost function C(y). Explain what you are doing.
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