Question: Let the long run total cost function be LTC 1 12

Let the long-run total cost function be LTC = (1/12) Qw 0.5 r 0.5.
a. Demonstrate that a doubling of input prices causes LTC to double.
b. Find the elasticity of total cost. This long-run total cost function is characterized by ___________ scale.
c. Let w = $16 and r = $25, and find LMC and LAC. Graph the LMC and LAC curves. Are these curves consistent with part b?
d. Is your answer to part b consistent with your answer to part d in Mathematical Exercise 4 in Chapter 9?

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