(a) Find the conditional input demand function for inputs 1 and 2, as well as the cost function for this firm.(b) What is the firm's marginal cost when it is producing y units of output? A firm produces its output using the following production function:f(x₁, x₂) = x₁ x ₂= x ²₁ x ²1/where x₁ is the amount of input 1 and x₂ is the amount of input 2.

Production function:Production is a function of land labor capital and entrepreneurship. It includes…

Answered: A firm produces its output using the…

A firm produces its output using the following production function: 1 f(x1, x₂) = x₁x₂ where x₁ is the amount of input 1 and x2 is the amount of input 2.

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter8: Production And Costs

Section: Chapter Questions

Problem 11QP

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Concept explainers

Isocost and Isoprofit Curve Analysis

An isocost curve in the production theory that is a crucial part of economics depicts different combinations of factor inputs at a given market cost. In other words, this shows all the combinations of production factors that cost the same for the firm to employ. Usually, this can be depicted as a downward sloping straight line when the firms act as the price-takers in the factor markets. The slope of this mainly depicts the relative prices of different production factors.

Question

(a) Find the conditional input demand function for inputs 1 and 2, as well as the cost function for this firm.

(b) What is the firm's marginal cost when it is producing y units of output?

A firm produces its output using the following production function:
f(x₁, x₂) = x₁ x ₂
= x ²₁ x ²1/
where x₁ is the amount of input 1 and x₂ is the amount of input 2.

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