Question
Consider the following production function for three firms operating in the same industry using capital (K) and labor (L) as inputs. Firm A = Q=12K^0.5
Consider the following production function for three firms operating in the same industry using capital (K) and labor (L) as inputs.
Firm A = Q=12K^0.5 L^0.25
Firm B =Q=10K^0.6 L^0.4
FirmC =O=K^3L
For each firm
Determine the firm's marginal product of capital function
Determine the firm's marginal product of labor function
Determine if the marginal product of capital function exhibits diminishing marginal returns
Determine if the marginal product of labor function exhibits diminishing marginal returns
Determine if the function exhibit increasing, constant or decreasing returns to scale.
Determine the function for the marginal rate of technical substitution
Determine if the production function has a diminishing marginal rate of technical substitution.
Derive the conditional input demand functions for labor and capital by Minimizing cost subject to output
Derive the conditional input demand functions for labor and capital by Maximizing output subject to cost constraint
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