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Could anyone help me with this problem 2. Suppose f(x1,x2)=min{x1,x2},w1=2, and w2=3. (a) Does this function exhibit constant, decreasing, or increasing returns to scale? (b)
Could anyone help me with this problem
2. Suppose f(x1,x2)=min{x1,x2},w1=2, and w2=3. (a) Does this function exhibit constant, decreasing, or increasing returns to scale? (b) In the short run, x2 is fixed at 100. Find this firm's short-run cost function sc(y) and output supply function y(p). Note that this firm cannot produce more than 10 (because f(x1,100)=min{x1,100}10), so effectively c(y)= if y>10. (c) Find this firm's long-run cost function lc(y) and output supply function y(p). 2. Suppose f(x1,x2)=min{x1,x2},w1=2, and w2=3. (a) Does this function exhibit constant, decreasing, or increasing returns to scale? (b) In the short run, x2 is fixed at 100. Find this firm's short-run cost function sc(y) and output supply function y(p). Note that this firm cannot produce more than 10 (because f(x1,100)=min{x1,100}10), so effectively c(y)= if y>10. (c) Find this firm's long-run cost function lc(y) and output supply function y(p)Step by Step Solution
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