Answered: Define the cost function c(w1,w2 ,y)…

Define the cost function c(w1,w2 ,y) =w1×1(w1,w2.y) + w2x2(w1,w2,y). Show that the cost function is homogeneous of degree one and concave in ( w1, w2).

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 18P

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Question

Define the cost function c(w1,w2 ,y) =w1×1(w1,w2,y)
+ w2x2(w1,w2.y). Show that the cost function is
homogeneous of degree one and concave in ( w1,
w2) .

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