Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

answer with work shown. Suppose that you know that a rm's production technology is described by the production function q = aI{Ll where the bar

answer with work shown.

image text in transcribed
Suppose that you know that a rm's production technology is described by the production function q = aI{Ll where the bar denotes the fact that the capital input is xed (i.e., the rm's decision horizon is short run), the parameter a > 0 and the parameter ['3 lies strictly between zero and one. The rm pays a xed price 7" for each unit of capital and a xed price w for each unit of labor. Given this information: 1. Find the marginal product of labor. 2. Find the average product of labor. 3. Find the short-run cost function. Show all your working. 4. Find the short-run average cost function. 5. Find the short-run marginal cost function. 6. Show that the marginal cost function, in terms of C], can be obtained by using the result that MC(q)=w/ M PL

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction To Business Statistics

Authors: Ronald M. Weiers

7th Edition

978-0538452175, 538452196, 053845217X, 2900538452198, 978-1111524081

Students also viewed these Economics questions