Question 5 Suppose a firm produces two goods and has cost function given by C 30 0 25Q 1 Q 2 (Q 1 ) 2 (Q 2 ) 2 a If the firm plans to produce 4 units of Q 1 and 16 units of Q 2 Does this cost function exhibit cost complementarities Does this cost function exhibit economies of scope

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Question #5 Suppose a firm produces two goods and has cost function given by C=30 - 0.25Q 1 Q 2 + (Q 1 ) 2

Question #5

Suppose a firm produces two goods and has cost function given by C=30 - 0.25Q₁Q₂+ (Q₁)² + (Q₂)²

a.If the firm plans to produce 4 units of Q₁ and 16 units of Q₂

Does this cost function exhibit cost complementarities?

Does this cost function exhibit economies of scope?

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