A competitive firm uses three factors of production. Its production function is f (x, y, z) = . Originally the factor prices were wx = $1, wy = $2, and wz = $3. The prices of factors x and z decreased to half of their previous levels, but the price of factor y stayed constant. The cost of production
A) decreased by more than.
B) decreased by.
C) decreased by exactly.
D) stayed constant.
E) decreased by less than.

Question

A competitive firm uses three factors of production. Its production function is f (x, y, z) =  . Originally the factor prices were wx = $1, wy = $2, and wz = $3. The prices of factors x and z decreased to half of their previous levels, but the price of factor y stayed constant. The cost of production
A) decreased by more than. 
B) decreased by. 
C) decreased by exactly. 
D) stayed constant. 
E) decreased by less than.

Quizplus · Accepted Answer

The Answer of A competitive firm uses three factors of production. Its production function is f (x, y, z) =  . Originally the factor prices were wx = $1, wy = $2, and wz = $3. The prices of factors x and z decreased to half of their previous levels, but the price of factor y stayed constant. The cost of production
A) decreased by more than. 
B) decreased by. 
C) decreased by exactly. 
D) stayed constant. 
E) decreased by less than.

A Competitive Firm Uses Three Factors of Production