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Suppose that a firm has the p production function f(x1; x2) = sqrt(x1) + x2^2. (a) The...

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Economics

Suppose that a firm has the p production functionf(x1; x2) = sqrt(x1) + x2^2.

(a) The marginal product of factor 1 (increases,decreases, stays constant) ------------ as the amount of factor 1increases. The marginal product of factor 2 (increases, decreases,stays constant) ----------- as the amount of factor 2increases.

(b) This production function does not satisfy thedefinition of increasing returns to scale, constant returns toscale, or decreasing returns to scale. How can this be?

(c)Find a combination of inputs such that doubling theamount of both inputs will more than double the amount ofoutput.
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The demand function for football tickets for a typicalgame at a large midwestern university is D(p) = 200, 000 -10, 000p.The university's football stadium holds a maximum of 100,000spectators. On a clearly labelled graph, draw the inverse demandfunction and the marginal revenue function.

Answer & Explanation Solved by verified expert
4.1 Ratings (649 Votes)
a The MP of factor 1 is decreasing The MP of factor 2 isincreasing Refer to image for the MP of both factorsbThe two factors have decreasing and increasing returns Hencethe production function as a whole cannot exhibit IRSCRS or DRSBasically the returns from the    See Answer
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