Multiple Choice
the production function is f(x1, x2) =x1/21x1/22.If the price of factor 1 is $4 and the price of factor 2 is $6, in what proportions should the firm use factors 1 and 2 if it wants to maximize profits?
A) x1 =x2.
B) x1 = 0.67x2.
C) x1 =1.50x2.
D) We can't tell without knowing the price of output.
E) x1 =6x2.
Correct Answer:

Verified
Correct Answer:
Verified
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