Suppose the production function for coffee (C)is C = min(B,W),where B = beans in pounds and W = water in gallons. Suppose the price of water is $.10 per gallon and the price of beans is $10 per pound.The expansion path
A)depends on the price of beans only.
B)depends on the price of water only
C)depends on the price of neither beans nor water.
D)depends of the costs of both beans and water.

Question

Quizplus · Accepted Answer

The production function C = min(B,W) indicates a fixed-proportion production process, meaning the expansion path is determined by the ratio of inputs, not their prices.

Suppose the Production Function for Coffee (C)is C = Min(B,W),where