A Competitive Firm with Output Y Has a Production Function

question 11

Multiple Choice

A competitive firm with output y has a production function y = (2x₁ + x₂) ^1/2, where x1 and x2 are inputs used in production.The firm produces the output minimizing cost.With input prices w1 and w2, which of the following is true?

• A)The firm has L-shaped isoquants.
• B)The firm must use the cheaper input.
• C)The firm must use only input x₁ if w₁ < 2w₂.
• D)The technology has increasing returns to scale.
• E)More than one of the above is true.

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Definitions:

Targeting

The process of identifying and focusing on specific segments of the market that a company views as potential customers for its products or services.

Positioning

In marketing, positioning refers to the technique by which marketers try to create an image or identity for a product, brand, or company in the perception of the target market.

Consultative Buying Centers

Groups within organizations that use a collaborative approach to purchasing, where members consult each other and consider different perspectives to make informed decisions.

Solicit Input

The act of seeking advice, opinions, or feedback from others to inform a decision or improve an outcome.