Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider a firm whose production function is q = (KL)1/4 Q1a. (5 marks) Find the short-run cost function CShort(q;w, r, K ) Q1b. (5 marks)

Consider a firm whose production function is

q = (KL)1/4

Q1a. (5 marks)

Find the short-run cost function

CShort(q;w, r, K )

Q1b. (5 marks)

Find the long-run cost function

CLong(q;w, r)

Q1c. (5 marks)

By subtracting between your derived short-run cost and long-run cost, show that

the long-run cost is always lower than the short-run cost for any given level of q,

regardless of the level of K and r.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

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

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

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

The Americans An Economic Record An Economic Record

Authors: Stanley Lebergott

1st Edition

0393953114, 9780393953114

More Books

Students also viewed these Economics questions

Question

Imagine you remain in the job listed under point

Answered: 1 week ago

Question

Explain the employee benefits that are required by law.

Answered: 1 week ago

Question

List the types of incentive plans.

Answered: 1 week ago