13. Suppose the technology of a producer is described by the production function f(',k) = 20€škš....
9. Suppose the firm's production function is given by f(K,L) min (K",L" (a) For what values of a will the firm exhibit decreasing returns to scale? Constant returns to scale? Increasing returns to scale? (b) Derive the long-run cost function and the optimal input choices. (c) Suppose the capital is fixed at R = 10,000 and a =. Assuming that the firm wants to produce less than 100 units, derive 10. Consider the production function: f(K, L) = KLi. Let...
9. Suppose the firm's production function is given by f(K,L) = min (Kº,L"} (a) For what values of a will the firm exhibit decreasing returns to scale? Constant returns to scale? Increasing returns to scale? (b) Derive the long-run cost function and the optimal input choices. (c) Suppose the capital is fixed at K = 10,000 and a = 1. Assuming that the firm wants to produce less than 100 units, derive 10. Consider the production function: f(K,L)=KLI. Let w...
Consider a firm with production function f(K,L) = K +L. (a) Suppose that capital level is currently fixed at K = 10. Find the short term production cost function for producing outputs greater than or equal to 10 units when w = 1 and r=1. (b) Suppose wage goes up to w' = 2 while the price of capital remains same at r = 1. Find the new short-run cost function for producing output greater than or equal to 10...
A firm has the production function Q= 4LK. The marginal products are given by MPL = 4K and MPK= 4L. Suppose that the prices of labour and capital are given by w and r. Solve for the quantities of L and K that minimize the cost of producing Q units of output. Provide an expression for the long run total cost function. What returns to scale are exhibited by this production function? What economies of scale are exhibited? Show the...
12. Consider a firm with production function f(K,L) = K+L. (a) Suppose that capital level is currently fixed at K = 10. Find the short term production cost function for producing outputs greater than or equal to 10 units when w = 1 and r = 1. (b) Suppose wage goes up to w' = 2 while the price of capital remains same at r = 1. Find the new short-run cost function for producing output greater than or equal...
11. Consider the production function: f(K,L)=K+L. Let w and r denote the price of labor and capital, and let p denote the price of the output good. (a) Find the cost minimizing input bundle and the cost function. (b) Find the profit maximizing output level and the profit function. 12. Consider a firm with production function f(K,L) = K +L. (a) Suppose that capital level is currently fixed at K = 10. Find the short term production cost function for...
4. Suppose the production function is equal to the following: Q = (√L)(K) Suppose the price of capital is equal to r, the price of labor is equal to w, and capital is fixed at 10 units. a) Determine the Cost function. b) Determine the marginal cost of producing an additional unit of output. c) Determine the average variable cost.
10. Consider the production function: f(KL)=K L. Let wandr denote the price of labor and capital, and let p denote the price of the output good. (a) Find the cost minimizing input bundle and the cost function as a function of w., and q. (b) Find the profit maximizing output level and the profit as a function of w, r, and p. 11. Consider the production function: f(KL)=K+L. Let w and r denote the price of labor and capital, and...
4. Suppose the production function is equal to the following: Q=VIK Suppose the price of capital is equal to r, the price of labor is equal to w, and capital is fixed at 10 units. a) Determine the Cost function. b) Determine the marginal cost of producing an additional unit of output. Show transcribed image text 4. Suppose the production function is equal to the following: Q=VIK Suppose the price of capital is equal to r, the price of labor...
Suppose the production function is given as Q = VLK. Suppose also that the price of labor w = 10 and the price of capital r = 40 1) Derive the equation of the isoquant corresponding to this production function? 2) What type of return to scale does this production exhibit? 3) Does this production function exhibit a diminishing MRTS? Why? 4) Based on this production function, is the law of diminishing marginal returns satisfied? 5) Derive the demand curves...