Suppose q=2L(1/2)+2k(1/2)
A) Find the profit function
B) Use the profit function to find the supply function
C) Find the long run cost function
D) use your answer from part "C" to check your answer for part "B"
Suppose q=2L(1/2)+2k(1/2) A) Find the profit function B) Use the profit function to find the supply...
a firm produces output according to the following function q= f(L,K) = L^1/2K^3/2. The cost of labor is $2 per hour and the rental cost of capital is $12 per hour. a) Determine the returns to scale for this function. b) Suppose the firm wishes to produce at cost $56. How Much capital and how much labor does the firm employ? c. Derive the short-run cost function with optimal amount of K from part b. d. Suppose that there are...
a firm produces output according to the following function q= f(L,K) = L^1/2K^3/2. The cost of labor is $2 per hour and the rental cost of capital is $12 per hour. a) Determine the returns to scale for this function. b) Suppose the firm wishes to produce at cost $56. How Much capital and how much labor does the firm employ? c. Derive the short-run cost function with optimal amount of K from part b. d. Suppose that there are...
A) Suppose q = min[2K,3L]. Find the short-run cost function. B) Can total cost ever be lower in the short run than the long run? Explain.
Suppose a firm has the following production function: Q = 2K L. The marginal product of capital is 2L, and the marginal product of labor is 2K. Assume that capital rents for $100 per unit per day, that labor can be hired for $200 per unit per day, and that the firm is minimizing costs. a. The firm will hire units of labor and - units of capital. b. What is the total cost of producing 60 units of output?...
1. (12.5 points, 15 minutes) A manufacturing firm’s production function is Q = 2KL + 2K. For this production function, MPL = 2K and MPK = 2L + 2. Suppose that the price r of capital services is equal to 1, and let w denote price of the labour services. (a) If the firm is required to produce 10 units of output, for what values of w would a cost-minimizing firm use only capital? (b) Now assume that the rental...
Suppose that firm’s production function is Q=min {2K, 4L}, and r=8$ and w=16$. Find the firm’s long-run total cost and average cost in terms of output.
A firm's production function is given by Q=2L"2 +31/2 where Q, L and K denote the number of units of outputs, labor and capital. Labor cost is $2 per unit, capital cost is $1 per unit and output sells at $8 per unit. Show that the profit function is 1=16L"2 + 24K12 - 2L-K and hence find the maximum profit and the values of Land K at which it is achieved. HINT: do not forget to check the second sufficient...
Consider a perfectly competitive market comprised of identical firms each facing the following cost function: C(q) = 4 +q? where q is the firm-specific level of production of the representative firm. The market demand function is Q(p) = 400 - 4p where Q(p) is the aggregate demand in the market (expressed as function of price) and p is the price a) Derive the firm-specific supply function of the representative firm as a function of price b) Assume there are N...
Suppose a firm has the production function: Q=2KL, where K is capital, L is labor and Q is quantity. If capital is fixed at 4 in the short run. What is the short run production function? A. Q=2L B. Q=8L C. Q=2K D. Q=8K
3. Suppose that the firm's production function is Q = min{2L, K}. Suppose hourl wage is $10 and hourly rent for capital is $20. What is the long-run total cost curve?