A Competitive Firm Uses Two Variable Factors to Produce Its

question 31

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 $5.Due to a lack of warehouse space, the company cannot use more than 17 units of x1.The firm must pay a fixed cost of $136 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)$36
• B)$33
• C)$21
• D)$9
• E)$17

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Definitions:

Healthy Life Expectancy

The average number of years that an individual is expected to live in a state of good health, subtracting years of ill health adjusted for severity.

Population Density

A measurement of the number of individuals living per unit area.

Coronary Heart Disease

A condition characterized by the narrowing of the coronary arteries, leading to a decreased blood supply to the heart muscle, often resulting in chest pain or heart attacks.

Life Expectancy

The average period that an individual is expected to live as determined by statistical analysis, often varying by geographical location, time period, and other factors.