The production function of a competitive firm is described by the equation y = The factor prices are p1 = $1 and p2 = $4 and the firm can hire as much of either factor it wants at these prices. The firm's marginal cost is
A) constant and equal to .50.
B) constant and equal to 3.
C) increasing.
D) decreasing.
E) None of the above.

Question

The production function of a competitive firm is described by the equation y =  The factor prices are p1 = $1 and p2 = $4 and the firm can hire as much of either factor it wants at these prices. The firm's marginal cost is
A) constant and equal to .50. 
B) constant and equal to 3. 
C) increasing. 
D) decreasing. 
E) None of the above.

Quizplus · Accepted Answer

The Answer of The production function of a competitive firm is described by the equation y =  The factor prices are p1 = $1 and p2 = $4 and the firm can hire as much of either factor it wants at these prices. The firm's marginal cost is
A) constant and equal to .50. 
B) constant and equal to 3. 
C) increasing. 
D) decreasing. 
E) None of the above.

The Production Function of a Competitive Firm Is Described by the Equation