A Competitive Firm Produces Its Output According to the Production

question 39

Multiple Choice

A competitive firm produces its output according to the production function y = min{x2, 100}.Let w be the price of the factor x, and let the price of output be $1.The demand for x, when the price of x is w, is

• A)10 when w < 1 and 100 otherwise.
• B)100 for all w.
• C)10 for all w.
• D)0 if w > 10 and 10 otherwise.
• E)None of the above.

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Definitions:

Marginal Cost

The charge for producing another unit of a good or service.

Demand Curve

An illustrative chart that depicts how the demand for a product varies with changes in its price.

Total Costs

The overall expenditure on the production of goods or services, covering both fixed and variable costs.

Flight Capacity

The maximum number of passengers or the amount of cargo that an airline can transport in a given period.