Y5 4. A firm manufactures outputs y₁ and y2 using two inputs ₁ and 2. The production function is1/2(y₁, y2) = f(x₁, x₂) = (x1/², x/²x¹/²).Let p; denote the unit price of y, and w; that of x. Describe the firm's optimization problem andderive the equations that define the critical points of the Lagrangean. Calculate then the solutionwhen p₁ = P2 = 1 and w₁ = W₂ = 2.

The firm maximizes its profit function and chooses the quantity of input to be used at given prices…

A firm manufactures outputs y₁ and y using two inputs ₁ and 72. The production function is (y₁, y2) = f(x1, x₂) = (x¹/², x¹/²x¹/²). 1/2 1/2 Let p; denote the unit price of y₁, and w; that of ₁. Describe the firm's optimization problem and derive the equations that define the critical points of the Lagrangean. Calculate then the solution when p₁ = P₂ = 1 and w₁ = ₂ = 2.

A firm manufactures outputs y₁ and y using two inputs ₁ and 72. The production function is (y₁, y2) = f(x1, x₂) = (x¹/², x¹/²x¹/²). 1/2 1/2 Let p; denote the unit price of y₁, and w; that of ₁. Describe the firm's optimization problem and derive the equations that define the critical points of the Lagrangean. Calculate then the solution when p₁ = P₂ = 1 and w₁ = ₂ = 2.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter10: Cost Functions

Section: Chapter Questions

Problem 10.1P

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