Let the production function of a firm is given as q=(x0.5 +y0.5)2 Where x and y are inputs and wx is the price of input x and wy is the price of input y. a) Assume the firm has a limited budget to spend on buying input. Find the cost-conditional input demand function for each input. b) Find the cost function of the firm.
Let the production function of a firm is given as q=(x0.5 +y0.5)2 Where x and y are inputs and wx is the price of input x and wy is the price of input y. a) Assume the firm has a limited budget to spend on buying input. Find the cost-conditional input demand function for each input. b) Find the cost function of the firm.
Chapter10: Cost Functions
Section: Chapter Questions
Problem 10.7P
Related questions
Question
Let the production function of a firm is given as
q=(x0.5 +y0.5)2
Where x and y are inputs and wx is the price of input x and wy is the price
of input y.
a) Assume the firm has a limited budget to spend on buying input. Find
the cost-conditional input
b) Find the cost function of the firm.
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