Asked by
Mitchell Kohler
on Oct 14, 2024
Verified
A firm has the production function Q X1/21X2.In the short run it must use exactly 35 units of factor 2.The price of factor 1 is $105 per unit and the price of factor 2 is $3 per unit.The firm's short-run marginal cost function is
A) MC(Q) 105Q-1/2.
B) MC(Q) 6Q/35.
C) MC(Q) 105 105Q2.
D) MC(Q) 3Q.
E) MC(Q) 35Q-1/2.
Short-Run Marginal Cost
The increase in cost a company faces to produce one additional unit of output when some inputs are fixed in the short term.
Production Function
A mathematical model that defines the maximum output of a company from different combinations of input factors.
- Acquire insight into the ideas of short-run and long-run cost functions in economic studies.
- Calculate the marginal and average costs based on given cost functions.
Verified Answer
RM
Learning Objectives
- Acquire insight into the ideas of short-run and long-run cost functions in economic studies.
- Calculate the marginal and average costs based on given cost functions.