8.18. A firm has the linear production function Q !

3L " 5K, with MPL ! 3 and MPK ! 5. Derive the expression for the 1ong-run total cost that the firm incurs, as a function of Q and the factor prices, w and r.

8.19. A firm uses two inputs: labor and capital. The price of labor is w and the price of capital is r. The firm’s long-run total cost is given by the equation Based on this equation, which change would cause the greater upward rotation in the long-run total cost curve: a 10 percent increase in w or a 10 percent increase in r? Based on your answer, is the firm’s operation more capital intensive or more labor intensive? Explain your answer.