A Competitive Firm Uses Two Variable Factors to Produce Its

question 23

Multiple Choice

A competitive firm uses two variable factors to produce its output, with a production function q = min{x1, x2}.The price of factor 1 is $4 and the price of factor 2 is $1. Due to a lack of warehouse space, the company cannot use more than 15 units of x1. The firm must pay a fixed cost of $90 if it produces any positive amount but doesn't have to pay this cost if it produces no output. What is the smallest integer price that would make a firm willing to produce a positive amount?

• A) $15
• B) $21
• C) $5
• D) $24
• E) $11

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Definitions:

Strategic Marketing Process

A method by which an organization allocates its marketing mix resources to reach its target markets and achieve competitive advantage.

Marketing Plan

A comprehensive document or blueprint outlining an organization's advertising and marketing efforts over a specific period of time.

Organizational Strategies

Comprehensive plans developed by businesses to achieve specific goals and to guide the company towards long-term growth and success.

Strategic Business Units

Distinct parts of a company that operate as separate entities, each with its own mission, strategy, and competitors.