What are the conditional demand functions

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Reference no: EM133343909

Question:

A firm has a production: y=x1+x2. Let w1 and w2 denoted the factor prices, and p the price output.

a) What are the conditional demand functions x1* and x2*?

b) Suppose that w1>w2. What is the LRAC(y)?. What is SRAC(y)?

c) What is minimum efficiency scale?( the minimum point, in terms of y, of the LRAC(y))

d) if x1 is fixed at x¯1=1, for what level of y will SRAC (y)= LRAC?

Reference no: EM133343909

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