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The firm BMZ produces bicycles using (w) and frames (f) as inputs. To produce one bicycle, the firm needs to use exactly, one frame and
The firm BMZ produces bicycles using (w) and frames (f) as inputs. To produce one bicycle, the firm needs to use exactly, one frame and two wheels.
(a) Write down the production function of the firm F(w,f).
(b)Does the firm's production function exhibit increasing, decreasing or constant returns to scale?
(c)Suppose wheels costs $25 each, whereas the frame costs $200 each. Find the total cost, average cost and marginal cost of producing y bicycles.
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