In workout problem 2O the price of factor 1 is $8 and the price of factor 2 is $16, in what proportions should the firm use factors 1 and 2 if it wants to maximize profits? We can't tell without knowing the price of output. Ox1 = 16x2. O x1 = 0.50x2. O x1 = X2- X1 = 2x2. %3D

In workout problem 2O the price of factor 1 is $8 and the price of factor 2 is $16, in what proportions should the firm use factors 1 and 2 if it wants to maximize profits? We can't tell without knowing the price of output. Ox1 = 16x2. O x1 = 0.50x2. O x1 = X2- X1 = 2x2. %3D

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

In workout problem 20.11, the production function is f(x1, x2) = x-/2,x/22. If the
price of factor 1 is $8 and the price of factor 2 is $16, in what proportions should the
firm use factors 1 and 2 if it wants to maximize profits?
%3D
We can't tell without knowing the price of output.
O x1 = 16x2.
%3D
Ox1 = 0.50x2.
X1 = X2.
X1 = 2x2.
%3D

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