Asked by
Nashely Hernandez-Rodriguez
on Dec 01, 2024
Verified
A competitive firm produces its output according to the production function y = min{x1/2, 10}.Let w be the price of the factor x, and let the price of output be $1.The demand for factor x, when the factor price is w, is
A) x =min{w1/2, 10}
B) x = max{w1/2/2, 100}.
C) x =min{1/4w2, 100}.
D) x = 10 + x1/2/2.
E) None of the above.
Production Function
An equation that describes the maximum output achievable with a given set of inputs or resources.
Factor Price
The price paid for the use of a factor of production such as labor, capital, or land.
Factor Demand
Refers to the demand for resources or inputs that are used in the production of goods or services.
- Acquire knowledge about how a business's production function is connected to inputs.
- Assess how variations in factor prices affect production expenses and choices regarding supply.
Verified Answer
DX
Learning Objectives
- Acquire knowledge about how a business's production function is connected to inputs.
- Assess how variations in factor prices affect production expenses and choices regarding supply.