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b Now suppose @ = 2L + 3K . Let the market price of L be w = 5 and the price of K be
b Now suppose @ = 2L + 3K . Let the market price of L be w = 5 and the price of K be r = 4. Let both L and K can vary with production. Compute the input demand functions as a function of Q. (4 Points) Calculate the marginal cost and average cost of the above function in subpart (b). Show them graphically. At what prices of textile will the producer shut down production. (3 Points) d Now suppose @ = 10L: K. The market prices of inputs are as in subpart (b) above. Compute the input demand functions as a function of @. Find the optimal production when the price of textile is $10 per yarn. (5 Points)
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