Drive the cost function for the following production function Q=min(2X1+X2, X1+2X2)

Question

Question

Drive the cost function for the following production function

Q=min(2*X1+X2, X1+2*X2)

business economics

Answer 1

Answer #1

The general cost function is

TC= w.X1+r.X2

Where w is cost of X1 and r is cost of X2

At tangency condition for the given production function

2X1+X2= X1+2X2

X1=X2

C= (w+r)X1 or (w+r)X2

Answer 2

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Drive the cost function for the following production function Q=min(2*X1+X2, X1+2*X2)