Question

If a firm uses x units of input in process A, it produces 32x3/2 units of output. In the alternative process B, the same input produces 4x3 units of output. For what levels of input does process A produce more than process B?

Answer 1

The outcomes produced by A would be greater than B. A further explanation is provided below.

Explanation:

Given:

In process A,

Produced units =
`32x^(1.5)`

In process B,

Produced units =
`4x^3`

If the outcomes are equivalent then,

⇒
`32x^(1.5)=4x^3`

⇒
`x^(1.5) = 8`

By taking log both sides, we get

⇒
`log \ 8= 1.5 \ log \ x`

⇒
`x=3.99`