A firm has the production function Q = X^1/2₁X₂.In the short run it must use exactly 35 units of factor 2.The price of factor 1 is $105 per unit and the price of factor 2 is $3 per unit.The firm's short-run marginal cost function is A)MC(Q)=105Q^-1/2. B)MC(Q)= 6Q/35. C)MC(Q)= 105 + 105Q2. D)MC(Q)= 3Q. E)MC(Q)= 35Q^-1/2.

Question

Quizplus · Accepted Answer

The correct answer is based on the given production function and the fact that the firm must use exactly 35 units of factor 2 in the short run. The marginal cost (MC) function reflects the change in total cost associated with producing one more unit of output, considering the prices of the inputs and the fixed quantity of factor 2. Option B correctly represents a marginal cost function that incorporates the fixed quantity of factor 2 and the price of factor 1, making it the most plausible choice given the information provided.

A Firm Has the Production Function Q = X1/21X2

A Firm Has the Production Function Q = X^1/2₁X₂