8.16. A hat manufacturing firm has the following production function with capital and labor being the inputs:

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8.16. A hat manufacturing firm has the following production function with capital and labor being the inputs:

Q ! min(4L, 7K)—that is, it has a fixed-proportions production function. If w is the cost of a unit of labor and r is the cost of a unit of capital, derive the firm’s long-run total cost curve and average cost curve in terms of the input prices and Q.

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Microeconomics

ISBN: 9780470563588

4th Edition

Authors: David Besanko, Ronald Braeutigam

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