Help! 4.1/3 1/3is w2.A firm uses two factors x₁ and x2 for production y = x1 x2The price of the product is 2. The price of x1 is w1.The price of X2The firm is endowed with one unit of x2.(a) In the short run, the firm can not adjust x2, and x2 = 1. Write down theshort-run profit-maximizing problem. What is the profit-maximizing output?What is the factor demand curve of x1?(b) In the long run, the firm can adjust x2. Write down the long-run profit-maximizing problem. What is the profit-maximizing output when w₁ = 1and w2 = 1?(c) Is the production function constant returns to scale, increasing returnsto scale, or decreasing returns to scale? Prove it.

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Answered: 4. 1/3 1/3 is w2. A firm uses two…

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter9: Perfect Competition

Section9.2: Perfect Competition In The Short Run

Problem 3ST

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