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:

Processing

The series of actions or steps taken in order to achieve a particular end, often used in the context of information or data handling.

Continuum

A continuous sequence in which adjacent elements are not perceptibly different from each other, but the extremes are quite distinct.

Deep Processing

A method of learning in which information is analyzed in a meaningful way to aid recall and understanding.

Shallow Processing

A cognitive processing level that involves minimal attention to meaning, as in focusing on a word's physical appearance rather than its significance.