If a competitive firm uses two inputs and has the production function F(x1, x2)  x 1/2 1  x 1/2 2, then its marginal cost curve is horizontal.

Question

If a competitive firm uses two inputs and has the production function F(x1, x2)   x 1/2 1    x 1/2  2, then its marginal cost curve is horizontal.

Imelda Becerra · Accepted Answer

Final Answer : False, Explanation :  The production function given is not clearly defined, but generally, for a competitive firm, the shape of the marginal cost curve depends on the production function and the cost of inputs. If the production function exhibits increasing, constant, or decreasing returns to scale, this will affect the shape of the marginal cost curve, which is not necessarily horizontal. A horizontal marginal cost curve implies constant returns to scale and constant input prices, which is a specific case and not a general rule for all production functions.

If a competitive firm uses two inputs and has the production function F(x1, x2) x^1/21  x^1/22, then its marginal cost curve is horizontal.

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If a competitive firm uses two inputs and has the production function F(x1, x2) x1/21  x1/2 2, then its marginal cost curve is horizontal.

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Learning Objectives

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Related questions

If a competitive firm uses two inputs and has the production function F(x1, x2) x^1/21  x^1/22, then its marginal cost curve is horizontal.