There are 100 identical demanders of product y, and the demand function for each individual is y = 10 - p. The production function for any firm is y = min(z₁,z₂). The long- run cost function for any firm is: A)y^*(w₁+ w₂). B)y^*w₁if w₁

Question

There are 100 identical demanders of product y, and the demand function for each individual is y = 10 - p. The production function for any firm is y = min(z₁,z₂). The long- run cost function for any firm is: A)y^*(w₁+ w₂). B)y^*w₁if w₁< w₂. C)y^*(w₁+ w₂)/2. D)y^*min(w₁,w₂).

Quizplus · Accepted Answer

The correct answer is A because the long-run cost function for any firm is y*(w1 + w2).

There Are 100 Identical Demanders of Product Y, and the Demand