Suppose a firm's production function is g = L 0.510.5 and the wage rate is w = $8 and the rental rate of capital is r = $2. The optimal long-run relationship between L and K is If the firm wants to produce 16 units, it should use units of capital and units of labor. The long-run cost of producing 16 units is Since the long-run total cost curve is linear, the equation of the curve is Long-run marginal cost and average total cost are equal to The long-run cost of producing 32 units is