2. For the following questions, suppose the firm has the production function f(x,x2) = x,2x/2. The market prices are p = 20, w, = 5, wz = 5, and input 2 is fixed at 2 = 1 %3D in the short-run. a. Find the short-run minimum cost function c,(y,&). (Hint: do not plug in the actual values for p, wl, etc.). b. Calculate VC, FC, AVC, AFC, AC, and MC for the short-run cost function you found in part b (Hint: now use p = 20, w, = 5, w, = 5, and &, = 1).

2. For the following questions, suppose the firm has the production function f(x,x2) = x,2x/2. The market prices are p = 20, w, = 5, wz = 5, and input 2 is fixed at 2 = 1 %3D in the short-run. a. Find the short-run minimum cost function c,(y,&). (Hint: do not plug in the actual values for p, wl, etc.). b. Calculate VC, FC, AVC, AFC, AC, and MC for the short-run cost function you found in part b (Hint: now use p = 20, w, = 5, w, = 5, and &, = 1).

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter10: Cost Functions

Section: Chapter Questions

Problem 10.6P

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