The production function of a competitive firm is described by the equation y = 2x11/2 6x21/2. The factor prices are p1 = $3 and p2 = $4 and the firm can hire as much of either factor it wants at these prices. What is the firm’s marginal cost?

We are going to find cost structure in terms of Q and then find Marginal Cost.

Answered: The production function of a…

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter8: Production And Costs

Section: Chapter Questions

Problem 11QP

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The production function of a competitive firm is described by the equation y = 2x₁^1/26x₂^1/2. The factor prices are p₁ = $3 and p₂ = $4 and the firm can hire as much of either factor it wants at these prices. What is the firm’s marginal cost?

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