Being driven by the high profit from digital asset trading, Doggycoin, Sulfikar has decided to set-up his own digital mining company. Let’s assume that two main essential inputs in digital asset production be the high-quality graphic card (C) and electricity (E). After observing the business for few months, he finds the production function as Cobb-Douglas technology as seen in image: Where q is continuous, strictly increasing, and strictly quasi-concave and q(0) = 0. Answer the following questions: a. If the prices of graphic card and electricity denoted by c and e, respectively, and we assume the cost-minimizing behavior. Solve for C and E in their prices and output level, and what is the total cost function C(e, c, q)? b. What are the conditional demands for input C and E?
Being driven by the high profit from digital asset trading, Doggycoin, Sulfikar has decided to set-up his own digital mining company. Let’s assume that two main essential inputs in digital asset production be the high-quality graphic card (C) and electricity (E). After observing the business for few months, he finds the production function as Cobb-Douglas technology as seen in image:
Where q is continuous, strictly increasing, and strictly quasi-concave and q(0) = 0.
Answer the following questions:
a. If the prices of graphic card and electricity denoted by c and e, respectively, and we assume the cost-minimizing behavior. Solve for C and E in their prices and output level, and what is the total cost function C(e, c, q)?
b. What are the conditional
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