Question
Suppose the production function is given by f(K,L) = 3KL, where K denotes capital and L denotes labor. The price of capital is 2
Suppose the production function is given by f(K,L) = 3KL, where K denotes capital and L denotes labor. The price of capital is 2 TL/machine-hr, the price of labor is 24 TL/person-hr, and capital is fixed at 4 machine-hr in the short run. a) Find the short-run TC, TVC, and TFC curves for this production process. Sketch them on a single graph. Do not forget to label all axes and necessary points on your graph. b) Find short-run ATC, AVC, AFC, and MC curves for this production process. Sketch them on a single figure. Do not forget to label all axes and necessary points on your graph.
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Macroeconomics
Authors: Glenn Hubbard, Anthony Patrick O'Brien, Matthew P Rafferty
1st Edition
978-0132109994, 0132109999
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