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A competitive firm uses two variable factors to produce its output, with the production function y = min{x1/2, x2}. The price of factor 1 is $4 and the price of factor 2 is $5. Due to a lack of warehouse space, the company cannot use more than 20 units of x1. The firm must pay a fixed cost of $80 if it produces any positive amount but doesn’t have to pay this cost if it produces no output. What is the lowest price that would make a firm willing to produce a positive amount?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91675180

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