If a firm's production function is f(z₁,z₂)= z₁+ z₂, its minimum cost of producing y units of output is: A)y min(w₁,w₂). B)y(w₁+ w₂)/2. C)y(w₁+ w₂). D)yw₁if w₁

Question

If a firm's production function is f(z₁,z₂)= z₁+ z₂, its minimum cost of producing y units of output is: A)y min(w₁,w₂). B)y(w₁+ w₂)/2. C)y(w₁+ w₂). D)yw₁if w₁< w₂.

Quizplus · Accepted Answer

The minimum cost of producing y units of output is achieved by using the input with the lowest cost per unit, hence the correct answer is the minimum of the two input costs multiplied by the output level y.

If a Firm's Production Function Is F(z1,z2)= Z1 + Z2

If a Firm's Production Function Is F(z₁,z₂)= Z₁+ Z₂