A Competitive Firm Uses Two Variable Factors to Produce Its

question 46

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 $8 and the price of factor 2 is $5.Due to a lack of warehouse space, the company cannot use more than 10 units of x1.The firm must pay a fixed cost of $80 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)$44
• B)$41
• C)$29
• D)$13
• E)$21

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Definitions:

Process Cost Summary

A process cost summary outlines the costs associated with each step of a manufacturing process, detailing the expenses for materials, labor, and overhead for each process stage.

Work in Process

Inventory that includes materials that are currently being processed into finished goods but are not yet complete.

Total Costs

The aggregate of all expenses incurred by a business, including both fixed and variable costs.

Final Production Department

The last stage in a manufacturing process where products are completed and ready for sale or distribution.