05 Profit Maximization & Short Run Supply Suppose a firm has a production function y = 4x1x2. Suppose that x2 = 16 in the short run while x, is variable. This means you can proceed as if y = 16x15. The firm can sell y for price p and pays w, for input i. a) How much of x, will the firm use? Express your answer in terms of p and w1. b) Given your expression from (a) for x1, express output y" in terms of p and w1. c) Express the firm's profit, , in terms of p, w1, and w2. d) What is profit if p=25, and w1 = 2 and w2=50. e) Assuming the same output and input prices, what is profit if the firm produces 0 units of output? Remember that x2 = 16 in the short run (i.e., even if the firm produces zero). f) To maximize profits, should the firm produce y = 0 or some y > 0