A competitive, cost-minimizing firm has the production function f (x, y) = x + 2y and...
A competitive, cost-minimizing firm has the production function f (x, y) = x + 2y and uses positive amounts of both inputs. If the price of x doubles and the price of y triples, then the cost of production will more than double.
The answer is false. It will be exactly doubled.
I wanna know how to solve this problem by using isoquant line and isocost line.
Please do not copy other's answer.
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A competitive, cost-minimizing firm has the production function
f (x, y) = x + 2y and...
A firm has the production function f(x, y) = min[2x, x + 2y). On the graph...
A firm has the production function f(x, y) = min[2x, x + 2y). On the graph below, use the line tool to draw the production isoquant for this firm where f(x, y) = 10. Make sure your isoquant extends to the edges of the graph. To refer to the graphing tutorial for this question type, please click here. Production Isoquant
A firm has a Cobb-Douglas production function q = AKL, where K denotes capital, L is...
A firm has a Cobb-Douglas production function q = AKL, where K denotes capital, L is labor, and A, a, b, are constants. ginal returns to labor in the short run if its production function is 1. Sketch an isoquant line, write a mathematical formula for its slope, and provide an interpretation for its meaning. 2. On a separate graph, draw an isocost line, write a mathematical formula for its slope, and provide an interpretation for its meaning. 3. On...
1. Sketch the production isoquant for a production function that takes two inputs (e.g. y = f[l,k]). Show the cost minim...
1. Sketch the production isoquant for a production function that takes two inputs (e.g. y = f[l,k]). Show the cost minimizing combination of inputs by adding an isocost line to your sketch. (a) What is the relationship between the trs and the relative price of one input compared to the other at the cost minimizing combination of inputs? (b) What does the assumption of a diminishing technical rate of substitution (trs) mean? (What does a diminishing trs mean imply for...
Consider a cost-minimizing firm that uses two inputs x, and x, to produce output y from...
Consider a cost-minimizing firm that uses two inputs x, and x, to produce output y from the production function y=x"X, where a >0 and B>0. The competitive input prices of x, and x, are given respectively as w, and wz. a) Find the firm's demand functions for inputs x, and xz. b) Find the firm's total cost, average cost, and marginal cost functions. c) Show that if a +B>1 then average cost is always greater than marginal cost.
Suppose a firm produces an output level according to the simple production function: Q = 5...
Suppose a firm produces an output level according to the simple production function: Q = 5 L K, which implies M P L = 5 K and M P K = 5 L. Further suppose a firm must pay labor (L) a wage rate (w) of $5 per unit, and the rental rate (r) on capital (K) is $25 per unit. A. Find the marginal rate of technical substitution. B. Write the equation for the isocost line. What is the...
2. Assume a firm can produce according to the production function: ? = ?(?, ?) =...
2. Assume a firm can produce according to the production function: ? = ?(?, ?) = ? + 3? Assume the wage, the cost of labor, is 6, and rent the cost of capital, is 12. What is the best combination of labor and capital to produce 12 units with? Illustrate your answer to part a with an isoquant/isocost drawing. If the wage decreased to $2, would this change how the firm will produce? If so, how? 3. Assume a...
Suppose a firm in a perfectly competitive market has the cost function c(y)= y2 + 2y...
Suppose a firm in a perfectly competitive market has the cost function c(y)= y2 + 2y +4 Now suppose that there is a sudden increase in demand that raises the market price to p= 8. How much does the firm produce at this price?
For Question 1-4, use the following information: A firm's production function is gives as: q=3K0.6 L0.4 and its cost...
For Question 1-4, use the following information: A firm's production function is gives as: q=3K0.6 L0.4 and its cost minimizing choice of inputs is L=250 and K=400 1. What is the value of MRTS at the firm's cost minimizing choice of input? 2. If the wage that the firm's pay to hire one unit of labor is 10, what is the user cost of capital? (Graph questions) <--- (Really important - please give clear steps and explanation) 3. Write down...
Suppose a firm in a perfectly competitive market has the cost function c(y)=y2 + 2y +4...
Suppose a firm in a perfectly competitive market has the cost function c(y)=y2 + 2y +4 Now suppose that there is a sudden increase in demand that raises the market price to p= 8. If the demand stays at this new level, what will the long-run quantity be for each firm?
Suppose a firm can use either Capital (K) or Labor (L) in a production process. The...
Suppose a firm can use either Capital (K) or Labor (L) in a production process. The firms Production function is given by Q = 5L + 15K. The price of Capital is $20 per unit and the price of Labor is $8 per unit. a) (4 points) What is the firm’s Total Cost function? TC(Q) = ____________________________ b) (8 points) Suppose the firm is producing 30 units of output (Q = 30). Using a graph, draw the firm’s isoquant for...
A firm has the production function f(x, y) = min[2x, x + 2y). On the graph below, use the line tool to draw the production isoquant for this firm where f(x, y) = 10. Make sure your isoquant extends to the edges of the graph. To refer to the graphing tutorial for this question type, please click here. Production Isoquant
A firm has a Cobb-Douglas production function q = AKL, where K denotes capital, L is labor, and A, a, b, are constants. ginal returns to labor in the short run if its production function is 1. Sketch an isoquant line, write a mathematical formula for its slope, and provide an interpretation for its meaning. 2. On a separate graph, draw an isocost line, write a mathematical formula for its slope, and provide an interpretation for its meaning. 3. On...
Consider a cost-minimizing firm that uses two inputs x, and x, to produce output y from the production function y=x"X, where a >0 and B>0. The competitive input prices of x, and x, are given respectively as w, and wz. a) Find the firm's demand functions for inputs x, and xz. b) Find the firm's total cost, average cost, and marginal cost functions. c) Show that if a +B>1 then average cost is always greater than marginal cost.
Suppose a firm in a perfectly competitive market has the cost function c(y)= y2 + 2y +4 Now suppose that there is a sudden increase in demand that raises the market price to p= 8. How much does the firm produce at this price?
Suppose a firm in a perfectly competitive market has the cost function c(y)=y2 + 2y +4 Now suppose that there is a sudden increase in demand that raises the market price to p= 8. If the demand stays at this new level, what will the long-run quantity be for each firm?
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