Suppose the long-run production function for a competitive firm is f(x1,x2)= min {x1,2x2}. The cost per unit of the first input is w1 and the cost of the second input is w2. .d. Write down the formula and draw the graph of the average cost function, as a function of y. .e. Write down the formula and draw the graph of the marginal cost function, as a function of y.

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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.