A competitive firm produces output using three fixed factors and one variable factor. The firm's short run
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Question:
A competitive firm produces output using three fixed factors and one variable factor. The firm's short run production function is q = 305x - 2x 2 ; where x is the amount of variable factor used. The price of output is $2 per unit and the price of the variable factor is $10 per unit. In the short run, how many units of x should the firm use?
(a) 37
(b) 150
(c) 21
(d) 75
(e) None of the above.
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