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6. Suppose that a firm's production function is estimated to be y = 12LAK where y, L, K denote output, labour and capital respectively, and
6. Suppose that a firm's production function is estimated to be y = 12LAK where y, L, K denote output, labour and capital respectively, and suppose that the rental rate per unit of capital is 5 and wages are f10 per unit of labour. Suppose that the firm's capital stock is fixed in the short term at K = 2. a. Find labour demand as a function solely of output. b. Find the firm's variable and average variable cost functions. c. Find the firm's fixed and average fixed cost functions. d. Find the firm's average cost function. e. Find the firm's marginal cost function. f. Draw the cost curves you have derived on a single diagram
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