8.5. A firm produces a product with labor and capital, and its production function is described by...

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8.5. A firm produces a product with labor and capital, and its production function is described by Q ! LK. The marginal products associated with this production function are MPL ! K and MPK ! L. Suppose that the price of labor equals 2 and the price of capital equals 1. Derive the equations for the long-run total cost curve and the long-run average cost curve.

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Microeconomics

ISBN: 9780470563588

4th Edition

Authors: David Besanko, Ronald Braeutigam

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