There Are 100 Identical Demanders of Product Y, and the Demand

question 90

Multiple Choice

There are 100 identical demanders of product y, and the demand function for each individual is y = 10 - p. The production function for any firm is y = min(z₁,z₂) . If the prices of z₁ and z₂ depend on aggregate input requirements in the following way: w₁ = z₁/200, w₂ = z₂/200, then:

• A)this is a decreasing cost industry.
• B)this is a declining industry.
• C)this is a constant cost industry.
• D)this is an increasing cost industry.

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