A Competitive Firm Produces Its Output According to the Production

question 25

Multiple Choice

A competitive firm produces its output according to the production function y = min{x^1/2, 10}.Let w be the price of the factor x, and let the price of output be $1.The demand for factor x, when the factor price is w, is

• A)x =min{w^1/2, 10}
• B)x = max{w^1/2/2, 100}.
• C)x =min{1/4w², 100}.
• D)x = 10 + x^1/2/2.
• E)None of the above.

---

Definitions:

Market Mechanisms

The use of market principles and forces to allocate resources and determine prices within an economy.

Formal Lines

Predetermined channels of communication and authority within an organization, established through its structure and policies to ensure effective coordination and control.

Virtual Organization

A network of continually evolving independent organizations that share skills, costs, and access to one another’s markets.

Independent Companies

Businesses that operate on their own, without being owned or controlled by a larger corporation.