Firm A has the following technology: f(x1; x2)=(xx2). The price of input 1 is w =...
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Firm A has the following technology: f(x1; x2)=√(x₁x2). The price of input 1 is w₁ = 8 and the price of input 2 is w2=2. The firm A wants to produce y units of output. Find analytically the conditional factor demand for the two inputs. Draw an isoquant a several isocost lines. Locate the cost-minimising input bundle. Explain the intuition behind the optimality condition you have found. What is the cost function? Firm A has the following technology: f(x1; x2)=√(x₁x2). The price of input 1 is w₁ = 8 and the price of input 2 is w2=2. The firm A wants to produce y units of output. Find analytically the conditional factor demand for the two inputs. Draw an isoquant a several isocost lines. Locate the cost-minimising input bundle. Explain the intuition behind the optimality condition you have found. What is the cost function?
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