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.

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter10: Cost Functions
Section: Chapter Questions
Problem 10.7P
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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.

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