Question
An entrepreneur has the following production function Q=K 5L 0.4and the factor prices are r=1 and w=1. The entrepreneur is interested in knowing: The type
An entrepreneur has the following production function Q=K 5L 0.4and the factor prices are r=1 and w=1. The entrepreneur is interested in knowing:
The type of economy of scale that the firm has.
The rate of substitutability of the factors (the Marginal Rate of Technical Substitution or TMST).
The expansion path of the firm.
The optimal amount of labor and capital
The equilibrium production.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Macroeconomics Principles Applications and Tools
Authors: Arthur O'Sullivan, Steven Sheffrin, Stephen Perez
9th edition
978-0134089027, 134089022, 978-0134420684
