1. A firm uses a single input to produce a commodity according to its short-run production function f(x) = 4\/x, where x is the number of units of input. The commodity sells for $100 per unit. The input cost $50 per unit. (a) the amount of input. (b) Write down a function that states the firm's profit as a function of What is the profit maximizing amount of input and output? (c) its input is subsidized by $10, explain in detail how this will affect the new input Suppose the firm is taxed $20 per unit of its output and the price of and output levels?

1. A firm uses a single input to produce a commodity according to its short-run production function f(x) = 4\/x, where x is the number of units of input. The commodity sells for $100 per unit. The input cost $50 per unit. (a) the amount of input. (b) Write down a function that states the firm's profit as a function of What is the profit maximizing amount of input and output? (c) its input is subsidized by $10, explain in detail how this will affect the new input Suppose the firm is taxed $20 per unit of its output and the price of and output levels?

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: The Cost Of Production

Section: Chapter Questions

Problem 4CQQ

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