A glass manufacturer's production function is q=10L^0.5 K^0.5(based on Hsieh, 1995). Its marginal product functions are MP_L=5K^0.5
Question:
Draw an accurate figure showing how the glass firm minimizes its cost of production.
What is the equation of the (long-run) expansion path for a glass firm? Illustrate this path in a graph. Derive the long-run total cost curve equation as a function of q. Suppose the goal for output is 1000 units, what is the optimal level of labor and capital to minimize the cost of production? (Use Excel or other software to derive the answer.
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Step by Step Answer:
See Figure 712 MP L MP K 1 2q L 12qK K L w r ...View the full answer
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Related Book For 
Microeconomics Theory and Applications with Calculus
ISBN: 978-0133019933
3rd edition
Authors: Jeffrey M. Perloff
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