The production function is given as fx1 x2 x12 x2 In the s

The production function is given as f(x1, x2) = (x1^2) x2 . In the short run, x2 is fixed at 1. The cost of x1 is $2 per unit and cost of x2 is $4. In order to produce 169 units as a desired output, how much is the total cost?

a. 6 b. 13 c. 25 d. 30

Solution

q = x₁².x₂

169 = x₁².(1)

x₁² = 169

x₁ = 13 units

Total cost = Price of x₁ * Quantity of x₁ + Price of x₂ * Quantity of x₂

= 2 x 13 + 4 x 1 = 26 + 4 = $ 30

So, answer is d) 30