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A Firm's Production Function Is F(x1, X2)= (Min{x1, 5x2})1/2

Question 1

Multiple Choice

A firm's production function is f(x1, x2) = (min{x1, 5x2}) 1/2.If the price of factor 1 is w1 = $5 per unit and the price of factor 2 is w2 = $25 per unit, then its supply function is given by the equation S(p) =


A) p/20.
B) max{w1, 5w2}p.
C) min{w1, 5w2}p.
D) 10p.
E) min{5p, 125p}p.

Correct Answer:

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