(a) Find the conditional input demand function for inputs 1 and 2, as well as the cost function for this firm.(b) What is the firm's marginal cost when it is producing y units of output? A firm produces its output using the following production function:f(x₁, x₂) = x₁ x ₂= x ²₁ x ²1/where x₁ is the amount of input 1 and x₂ is the amount of input 2.

Production function:Production is a function of land labor capital and entrepreneurship. It includes…

Answered: A firm produces its output using the…

A firm produces its output using the following production function: 1 f(x1, x₂) = x₁x₂ where x₁ is the amount of input 1 and x2 is the amount of input 2.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: If the demand function for math self-help videos is given by 45 - 0.4x, and the total cost function…

A: Demand Function for math self-help videos can be written as:P = 45 - 0.4x , where P is the price ,…

Q: 1 1 2. Suppose a producer's production function is F(K, L) = 3KZL The cost of K is 20 (r = 20) and…

A: Microeconomic firm theory investigates how companies maximize profit through production, resource…

Q: b Now suppose Q = 2L +3K. Let the market price of L be w = 5 and the price of K be r = 4. Let both L…

A: b) Suppose the production function is Q = 2L + 3K, where Q represents the output quantity, L is the…

Q: Ing fong TC = 8Q³ - 96Q² + 32Q Derive the expressions for marginal cost and average cost. What is…

A: Average cost: ‘average cost’ is the ‘total cost’ divided by the number of units of the good. It…

Q: 2. The weekly marginal cost of producing x ice cream makers is 28+ 0.05x dollars per ice cream…

A: Cost function can be written as follows:

Q: The cost function of producing Q units of good s.t:

A: ‘Total cost’: ‘Total cost’ is the amount that includes all the expenses that are paid to produce a…

Q: OR (b) Define (i) Marginal cost and (ii) Marginal revenue. The cost of producing x widgets is given…

A: (i) Marginal Cost Marginal Cost (MC) is the additional cost incurred by producing one more unit of a…

Q: The market for smart thermostats has grown increasingly competitive. Producers of smart thermostats…

A: As we know that in the long run equilibrium the form earns only zero profit That means normal profit…

Q: When a firm has a fixed input, all of which must be used all the time, it said that input is?

A: The production function links physical amounts of inputs to physical quantities of output. Cost…

Q: An oyster farmer produces two types of oysters - Crassostrea-Gigas (Pacific Oysters) and…

A: Total Cost function (For both goods ) : TC = 0.45P + PK + 0.75KInverse demand function for P :…

Q: (4) w = 3. firm's production function is F(K, L) = 2√/K + L. Factor prices are r = 2 and (a) Find an…

A: The marginal product of labor represents the increase in output as a result of an increase in labor…

Q: 1. Find the cost minimizing input demand functions (x₂ (w, q)) and the cost function (c(w, q)) for…

A: The production function estimates the required inputs to produce the target output level. It defines…

Q: A firm's production function is given by Q = 8L?K+ 7L3 Unit capital and labour costs are $1 and $7…

A: the production function is the function that shows the factor of production.

Q: A firm has a linear demand function for it's product.When the price of the product is sh.20,the…

A: The price of product is given as 20 and the quantity demanded at that price is 40 units.The price…

Q: 1. It costs $25,000 to build 30 refrigerators. It costs $30,000 to build 40 refrigerators.…

A: Cost: It is the value of goods and services in terms of money.

Q: what is the ordered pair ?

A: The break even point in any business is where your revenue is just equal to your expenses. The cost…

Q: 25) If a firm has the cost function C(q) = 5q² + 20q + 180 and the marginal cost function MC(q) =…

A: average cost or unit cost is equal to total cost divided by the number of units of a good produced…

Q: . A firm’s production is represented by the following function: Q = L0.4 K0.6 . The rental rate of…

A: The link between the physical production and the numerous production parameters, or the output to…

Q: Given cost and price (demand) functions C(q)= 110q + 44,600 and p(g) = - 2q + 860, what is the…

A: The increase in income that occurs from the sale of one additional unit of output is known as…

Concept explainers

Isocost and Isoprofit Curve Analysis

An isocost curve in the production theory that is a crucial part of economics depicts different combinations of factor inputs at a given market cost. In other words, this shows all the combinations of production factors that cost the same for the firm to employ. Usually, this can be depicted as a downward sloping straight line when the firms act as the price-takers in the factor markets. The slope of this mainly depicts the relative prices of different production factors.

Question

(a) Find the conditional input demand function for inputs 1 and 2, as well as the cost function for this firm.

(b) What is the firm's marginal cost when it is producing y units of output?

A firm produces its output using the following production function:
f(x₁, x₂) = x₁ x ₂
= x ²₁ x ²1/
where x₁ is the amount of input 1 and x₂ is the amount of input 2.

Video Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Define Production function:

VIEW

Step 2: Calculate Input Demand Function and Cost Function:

VIEW

Step 3: Calculate firm's marginal cost

VIEW

Solution

VIEW

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Assume a firm's short-run cost function is given by the following expression: C(q) = 2+q+q2 If the firm can sell each unit of their output at a price of p=9 dollars, what is the maximum profit the firm can earn in the short-run? a.) Maximum Profit = ? dollars
If the average cost function of a good is 15 AC = +20 + 11 '이 find the fixed costs and an expression for the marginal cost function. The fixed costs are (Type a whole number.) The expression for the marginal cost function is (Simplify your answer. Type an expression using Q as the variable.)
define total fixed costs
Suppose a firm has the following production function Q = f(K,L) = (1/2)L(2/3)K(1/3) and a total cost function TC = wL + rK The rental cost of capital is 2 euros per hour and the labor wage is 4 euros per hour. Suppose also that in the short-run, the firm uses 8 machines in the production process. (a) Show that the firm’s short-run average cost (SRAC) is SRACK=8 = (16/Q)+ 4√? (b) Draw the SRAC curve(c) By solving the first order conditions that the global minimum of production is 4(d) Show that the firm’s long-run average cost (LRAC) is 12. Hint: Start by obtaining the firm’s long-run expansion path(e) Draw both the SRAC and the LRAC and explain why the SRAC is always equal or above the LRAC.
14. The research department of Acme, Inc. has determined the marginal cost function for one particular item to be m(x) = 0.12e0.04x dollars per item, where x is the number of items produced. If Acme's fixed costs amount to $3,000, find the cost function, C(x), for the company.
Suppose a firm’s cost function is given by: C= 50 + 4q2 a) Find the equations for AFC, AVC and MC. b) If w=$4, what’s the short run production function for this firm?
When a firm produces one unit, the variable cost is $3. When the firm produces two units, the variable cost is $6. What is the marginal cost associated with two units of production.
Craig and Javad run a paper company. Each week they need to produce 1,000 reams of paper to ship to their customers. The paper plant's longrun production function is Q = 4KL, where Q is the number of reams produced, K is the quantity of capital rented, and L is the quantity of labor hired. The weekly cost function for the paper plant is C = 20K + 4L, where C is the total weekly cost. (a) What ratio of capital to labor minimizes Craig and Javad's total costs? (b) How much capital and labor will Craig and Javad need to rent and hire in order to produce 1,000 reams of paper each week? (c) How much will hiring these inputs cost them?
A5
K A cereal factory has weekly fixed costs of $22,000. It costs $1.26 to produce each box of cereal. A box of cereal sells for $4.06. Find the rule of the cost function c(x) that gives the total weekly cost of producing x boxes of cereal. OA. c(x)=1.26x OB. c(x)=22,000+ 1.26x OC. c(x)=22,000 +4.06x OD. c(x)=22,000+ 2.8x
A farm produces rice, which is sold in 50 kilogram bags. Let Q denote the number of bagsproduced per week during harvest time. Costs C are denoted in units of dollars. The totalweekly cost function for producing the product is C = 4Q + 100. The total weekly income function for this product is I = 50Q – 2Q2. What is the profit function P as a function of Q and sketch it using P values 0, 5, 10,15, 20 and 25.
1. Suppose the total-cost function for a firm is given by C = qw 1/4 3/4 a. Use Shephard's lemma to compute the (constant output) demand functions for each input, k and 1. b. Calculate the average cost and marginal cost. c. Describe the returns to scale for the underlying production function for q.