A Competitive Firm Uses a Single Input X to Produce

question 41

Multiple Choice

A competitive firm uses a single input x to produce its output y. The firm's production function is given by y = for quantities of x between 0 and 4. For quantities of a greater than 4, the firm's output is y = 4 + x. If the price of the output y is $1 and the price of the input x is $3, how much x should the firm use to maximize its profit?

• A)16/9
• B) 4
• C) 0
• D)4/9
• E)9/2

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