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A competitive firm with output has a production function f(x 1 ,x 2 )= (4x 1 + x 2 ) 1/2 , where x 1

A competitive firm with output has a production function f(x1,x2)= (4x1 + x21/2, where x1 and x2 are inputs used in production. The firm produces the output by minimizing cost. With input prices p1 and p2, which of the following is true

  • A. The production technology has constant returns to scale.
  • B. The firm must use only input x1 if p1 < 1.5p2
  • C. The firm must use only input x1 if p1 < 3p2
  • D. The firm must use only input x1 if p1 < 4 p2

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