Firm 1 has cost function c¹(w, y) , which determines the cost of producing at least output

level y when the vector of input prices is w. This cost function is derived as a result of

cost minimization problem. Firm 2 has cost function c² (w, y) which is also derived as a

result of a cost minimization problem for Firm 2. The relation between these two cost

functions is the following:

c² (w, y) = (1/ 2)c¹(2w, y)

What can you say about the output supply function of these two firms.