Results 1 to 3 of 3

Math Help - advanced microeconomics

  1. #1
    Newbie
    Joined
    Jan 2014
    From
    Groningen
    Posts
    4

    advanced microeconomics

    I was hoping someone could help me with this;

    Suppose that a firm produces 1 output with n inputs.
    The production function equals: y=x1ax2a...xn With 0<a<1.
    Derive the cost function of this firm.
    Attached Thumbnails Attached Thumbnails advanced microeconomics-latex6.png  
    Follow Math Help Forum on Facebook and Google+

  2. #2
    Super Member
    Joined
    Oct 2012
    From
    Ireland
    Posts
    591
    Thanks
    159

    Re: advanced microeconomics

    What have you tried already?
    Can you explain what a production function is to those of us who didn't study economics.
    Follow Math Help Forum on Facebook and Google+

  3. #3
    Super Member
    Joined
    Feb 2014
    From
    United States
    Posts
    564
    Thanks
    272

    Re: advanced microeconomics

    Quote Originally Posted by reinoutg View Post
    I was hoping someone could help me with this;

    Suppose that a firm produces 1 output with n inputs.
    The production function equals: y=x1ax2a...xn With 0<a<1.
    Derive the cost function of this firm.
    To answer Shakarri's question first, a production function relates physical quantities of inputs and the physical quantity of output. For example, it will relate man hours of labor, tons of iron ore, tons of coke, and tons of limestone required to produce so many tons of carbon steel. A cost function relates monetary cost to physical units of output produced. What cost, you ask? There are total cost functions, average cost functions, and marginal cost functions. The theory of the firm explains what a profit maximizing firm would do given certain constraints on production, cost, and revenue functions and exact knowledge of those functional relationships.

    As for the original question, it is unanswerable AS POSED. We do not know what type of cost function (total, average, or marginal) is required. Are input prices fixed regardless of quantity? I doubt we have been given the context of the problem.
    Last edited by JeffM; June 21st 2014 at 07:12 AM.
    Follow Math Help Forum on Facebook and Google+

Similar Math Help Forum Discussions

  1. Microeconomics Help
    Posted in the Business Math Forum
    Replies: 2
    Last Post: May 24th 2010, 05:26 AM
  2. Microeconomics Help
    Posted in the Business Math Forum
    Replies: 1
    Last Post: May 23rd 2010, 02:50 AM
  3. Microeconomics question...pls help
    Posted in the Advanced Applied Math Forum
    Replies: 1
    Last Post: December 7th 2009, 10:56 AM
  4. microeconomics externalities help!!!
    Posted in the Business Math Forum
    Replies: 1
    Last Post: April 15th 2009, 04:21 PM
  5. Microeconomics help.
    Posted in the Business Math Forum
    Replies: 1
    Last Post: February 8th 2009, 04:20 AM

Search Tags


/mathhelpforum @mathhelpforum