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Solve clearly Consider the following set-up: A firm has production function given by Q = F(K, L) = AK1/2 L1/2 where A > 0 is

Solve clearly

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Consider the following set-up: A firm has production function given by Q = F(K, L) = AK1/2 L1/2 where A > 0 is a constant. Wages are equal to w. In the short run, if technology improves and increases A a small amount (i.e. a calculus-like change) then the marginal change in variable costs at every Q will O Decrease by 202 KA2 O Decrease by w 202 KA2 O Increase by w 202 KA2 O Increase by 202 KA2

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