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Continue from b) c) Suppose we are in the short-run. For a fixed K such that K = Kbar. Find the optimal value of L*.
Continue from b) c) Suppose we are in the short-run. For a fixed K such that K = Kbar. Find the optimal value of L*. (8 points)d) Let w be the price of each unit of labor and r be the price of each unit of capital.Calculate the short-run cost function. C^SR(q). e) Identify the variable cost and fixed cost in the short-run cost function, C^SR(q)that you calculated in d). f) Calculate the average cost and marginal cost of the short-run cost function,C^SR(q) that you calculated in d).
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