Consider the following production function for a firm using two inputs x and y, Q=20x+14y- 2x²+2xy- y²where q denotes the quantity of output that is produced. An increase in the quantity of y: A)is ambiguous in terms of the effect it has on the marginal product of x. B)does nothing to the marginal product of x. C)increases the marginal product of x. D)decreases the marginal product of x.

Question

Quizplus · Accepted Answer

The marginal product of x, when considering the effect of y, is derived from the partial derivative of the production function with respect to x. In this function, the term involving both x and y is $2xy$, which indicates that the marginal product of x increases with an increase in y, as the coefficient of y in this term is positive.

Consider the Following Production Function for a Firm Using Two