Question

Suppose that a firm produces two goods, q, and qz and uses k, and k, as...

Suppose that a firm produces two goods, q, and qz and uses k, and k, as inputs of 2 1 production. The input requirement matrix is given by C = 3 4 a) Show that the firm will require k, = 20 and k, = 55 to produce 5 units of q, and 10 units of 92 · b) Let the prices of inputs be Php 5 per unit and Php 10 per unit, respectively, and 5 is an input price vector. Provide a solution if zł Cq = 650. 10 What is the economic meaning of z* Cq in this example?

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