Find the conditional factor demand for factor \(x_2\) if the firm wants to produce \(y\ =\ 25.1\) units of output with the production function \(f(x_1,x_2)\ =\min{(0.5x_1,0.3x_2)}\). Price of output \(p\ =\ 39.1\) and prices of inputs are \(w_1\ =\ 5.3\) and \(w_2\ =\ 8.7\). Hint: 1. Think what is the cheapest way to produce \(y\) units of output given this specific produciton function. 2. Derive demand for \(x_2\) as a function of \(y\), \(w_1\) and \(w_2\) only Type your answer with at least 4 decimal digits! Answer:
Find the conditional factor demand for factor \(x_2\) if the firm wants to produce \(y\ =\ 25.1\) units of output with the production function \(f(x_1,x_2)\ =\min{(0.5x_1,0.3x_2)}\). Price of output \(p\ =\ 39.1\) and prices of inputs are \(w_1\ =\ 5.3\) and \(w_2\ =\ 8.7\). Hint: 1. Think what is the cheapest way to produce \(y\) units of output given this specific produciton function. 2. Derive demand for \(x_2\) as a function of \(y\), \(w_1\) and \(w_2\) only Type your answer with at least 4 decimal digits! Answer:
Chapter29: Resource Markets
Section: Chapter Questions
Problem 3E
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