A Competitive Firm Uses Three Factors of Production

Multiple Choice

A competitive firm uses three factors of production.Its production function is f (x, y, z) = (x + y) ^1/2 z ^1/2.Originally the factor prices were wx = $1, wy = $2, and wz =$3.The prices of factors x and z decreased to half of their previous levels, but the price of factor y stayed constant.The cost of production

A) decreased by more than 1/2.
B) decreased by 1/3.
C) decreased by exactly 1/2.
D) stayed constant.
E) decreased by less than 1/3.