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The production function is ( ) = 20 - 2 and the price of output is normalized to $1. Let $ be the price of
- The production function is ( ) = 20 - 2 and the price of output is normalized to $1. Let $ be the price of the input 0.
- a. Show that this production function exhibits decreasing returns to scale.
- b. State and solve the profit maximization problem, and show that the input demand function is () = 20 2 .
- c. For what values of , will the optimal be zero?
- d. For what values of , will the optimal x be 10?
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Microeconomics
Authors: Austan Goolsbee, Steven Levitt, Chad Syverson
1st Edition
978-1464146978, 1464146977
