Suppose the Production Function Faced by the Firm Is Q

question 32

Multiple Choice

Suppose the production function faced by the firm is Q = A^1/3 B^1/3.If the firm increases the use of both inputs by 1 percent,output will increase by

• A)2 percent.
• B)more than 10 percent.
• C)0 percent.
• D)less than 1 percent.

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Definitions:

Market Price

The current value at which an asset or service can be bought or sold in a market, often determined by supply and demand dynamics.

Cooperative

An organization formed by individuals to market new products. Individuals in a cooperative pool their resources to gain an advantage in the market.

Crops

Plants cultivated by agriculturalists for use as food, feed, fiber, or fuel.

Trade Name

The name under which a business operates and is known to the public, distinct from the company's legal name.