Question

1. Let the production function be y=. (a) Suppose the price of x is w = 1. Find the firm's total cost curve C(s), average cost curve AC(y), and marginal cost curve MC(y). (b) Assume that p min AC(y), find the firm's supply curve y(w.p). (e) Suppose the price of y is p = 10, and the price of the input x is w = 1, calculate the firm's profit.

Answer 1

(a) wol y=x2 ay Cost Cry)= w.x=y² Accys & Cly) - 7 - Y mclys = ally) = 24 (3) pamin Ally) Firus supply curve y(w, p) marginal & MPx)= dy = Jr Product ofxt Demand for a we=Po Mix wa Per el ya un dre El Ty = P/w) - supply ccone (from Mc unene) p-10 W-l clysa ye = 10/10 Profit - TR - TO 2 prog- cry) 2 100 y - 4² – 10 10 – (10) 2 prosto