Question: A cookie firm usestwoinputstoproducecookiesaccordingtoaproduction function given by f(x1, x2) = 3x1+x2.Cookies sell at $16 per crate.Input 1 costs $3 per unit and input 2 costs

A cookie firm usestwoinputstoproducecookiesaccordingtoaproduction function given by f(x1, x2) = 3x1+x2.Cookies sell at $16 per crate.Input 1 costs $3 per unit and input 2 costs $2.

a. If input 1 is fixed at x1 = 1, find the profit maximizing level of x2.

b. What profit level, associated with your answer to (a), is enjoyed by Rip-pin' Good Cookies when x1= 1?

c. Suppose the firm is free to vary its usage of all inputs.Does the firm need to change its usage of x1 to maximize profit?Explain your answer by writing down a mathematical relationship using p and w1 to characterize the effect of varying x1 on the firm's profits.

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