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.




Sale on SolutionInn
Sales0
Views159
Comments
  • CreatedNovember 18, 2014
  • Files Included
Post your question
5000