7. An Italian sausage makers production function is Q = 8k.25 L.25 MPK = 2K-.75 L.75, MPI...
Fantastic news! We've Found the answer you've been seeking!
Question:
7. An Italian sausage maker’s production function is Q = 8k.25 L.25 MPK = 2K-.75 L.75, MPI = 6K.25 L-.25
• Determine the firm’s short-run cost equation (assume K is the fixed input).
• Determine the firm’s long-run cost equation
• If the price of K is $4 and the price of L is $24 and K is fixed at 32 units determine the K, L, Q where the short-run cost equals the long-run cost. What is the cost?
Related Book For
Managerial Economics Theory Applications and Cases
ISBN: 978-0393912777
8th edition
Authors: Bruce Allen, Keith Weigelt, Neil A. Doherty, Edwin Mansfield
Posted Date: