Question
The production function of a firm is q = 2 L K M . In the short run capital (K) and labor (L) are constant,
The production function of a firm is q = 2LKM .
In the short run capital (K) and labor (L) are constant, where K = 25 and L = 100. If W (wage) = 20, R (interest rate) = 50 and PM (raw material price) = 10,
(a) Find the cost function
b) Identify the Fixed Cost and Variable Cost functions.
c) Find the average fixed cost (AFC), average variable cost (AVC), average total cost (ATC) and marginal cost (MC) functions.
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The Wisdom Of Crowds
Authors: James Surowiecki
1st Edition
0385721706, 9780385721707
