Jamie runs an Android app business. She has production function f(x1,x2) = x11/3 x21/4. The price...

Jamie runs an Android app business. She has production function f(x1,x2) =

x₁^1/3 x₂^1/4. The price of factor 1 is w1 = 2, the price of factor 2 is w2 = 3, and the price of the output is 12.

Does this production function exhibit increasing, decreasing, or constant return to scale?
Write out the short-run profit maximization problem with x̄₂ = 81.
Solve the short-run profit maximization problem by showing all the important

steps.
Find the short-run production level that maximizes the profit.
Write out the long-run profit maximization problem.
Solve the long-run profit maximization problem.

Expert Solution

Rahul Sunny answered 9 months ago

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