What kind of factor input is factory rent/purchase?
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Which of the following is the cost of production?
A. Glass in an automobile.
B. Glass in an automobile and rent on a factory.
C. Advertising.
D. Rent on a factory.
A firm’s production function is given by f(x1,x2) = (1/2) x11/5 x24/5. Assume that the markets for the input factors are competitive. The market prices for input factor 1 and input factor 2 are given by p1 = 1 and p2 = 8 respectively. Find the optimum amount of x1 and x2.
The sum of product of factor payments and input is called _____