The production function is y = min{x1 , x2} where x1 and x2 are the amounts of two inputs used. The price of x1 is $18 and the price of x2 is $20. a. If the firm wants to produce y = 120 units of output, how much is the (minimum) cost? b. What is the firm’s total cost function c(y)? (
The production function is y = min{x1 , x2} where x1 and x2 are the amounts of two inputs used. The price of x1 is $18 and the price of x2 is $20. a. If the firm wants to produce y = 120 units of output, how much is the (minimum) cost? b. What is the firm’s total cost function c(y)? (
Chapter10: Cost Functions
Section: Chapter Questions
Problem 10.6P
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The production function is y = min{x1 , x2} where x1 and x2 are the amounts of two inputs
used. The price of x1 is $18 and the price of x2 is $20.
a. If the firm wants to produce y = 120 units of output, how much is the (minimum)
cost?
b. What is the firm’s total cost function c(y)? (
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