What is the marginal cost of an increase in w1

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Assume a firm wants to minimize its cost of producing y amount using x1 and x2 as inputs, which means it wants to minimize w1x1 + w2x2 subject to x1^(1/2)x2^(1/2)= y:

(a) Using Lagrange multiplier method, find optimal x1 and x2 as functions of w1,w2 and y.

(b) What is the marginal cost of producing a higher level of y?

Reference no: EM13220187

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