Question: In Solved Problem 7.6, Equation 7.26 gives the long-run cost function of a firm with a constant-returns-to-scale Cobb-Douglas production function. Show how, for a given

In Solved Problem 7.6, Equation 7.26 gives the long-run cost function of a firm with a constant-returns-to-scale Cobb-Douglas production function. Show how, for a given output level, cost changes as the wage, w, increases? Explain why.
Equation 7.26,
K = (0.4/0.6) (24/8)L = 2L.

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