# Question: For the production function in exercise 1 let the price

For the production function in exercise 1, let the price of labor be w and the price of capital be r.

a. The efficient usage function for labor is L* = __________________ .

b. The efficient usage function for capital is K* = __________________ .

c. Find the long-run cost functions: LTC, LAC, and LMC.

d. Show that both LAC and LMC increase at any Q when either w or r increases.

a. The efficient usage function for labor is L* = __________________ .

b. The efficient usage function for capital is K* = __________________ .

c. Find the long-run cost functions: LTC, LAC, and LMC.

d. Show that both LAC and LMC increase at any Q when either w or r increases.

## Answer to relevant Questions

The production function for a firm is Q = 24L5K5. In the short run, the firm has a fixed amount of capital, K = 121. The price of labor is $10 per unit, and the price of capital is $20 per unit. a. The short-run production ...Consider the Cobb-Douglas production function Q = 36 K0.5 L 1.0. a. Find the marginal product functions. b. Write equations for the MRTS and the output elasticities. c. The function coefficient is equal to , so the ...If all the assumptions of perfect competition hold, why would firms in such an industry have little incentive to carry out technological change or much research and development? What conditions would encourage research and ...The MidNight Hour, a local nightclub, earned $100,000 in accounting profit last year. This year the owner, who had invested $1 million in the club, decided to close the club. What can you say about economic profit (and the ...The Ali Baba Co. is the only supplier of a particular type of Oriental carpet. The estimated demand for its carpets is Q = 112,000 − 500P + 5Mwhere Q = number of carpets, P = price of carpets (dollars per unit), and M = ...Post your question