Question: (2) A firm has a production function given by Q =. Suppose that each K0.75L0.75unit of capital costs R and each unit of labor costs

(2) A firm has a production function given by Q =. Suppose that each K0.75L0.75unit of capital costs R and each unit of labor costs W. Answer the following questions: (a) Derive the long-run demands for capital and labor. (b) Derive the total cost curve. (c) Derive the long-run: (i) average total cost curve. (ii) marginal cost curve. (d) How do marginal and average costs change with increases in output. Explain

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

A firm has a production function given by Q = 10K0.25L0.25. Suppose that each unit of capital costs R and each unit of labor costs W. a. Derive the long-run demands for capital and labor. b. Derive...

3. A firm has a production function given by Q = 10K 0.25 L 0.25 . Suppose that each unit of capital costs R and each unit of labor costs W. a. Derive the long-run demands for capital and labor. b....

1) Suppose a firm has a production function given by Q = L 1/2 K 1/2 . Therefore, The firm can purchase labor, L at a price w = 15, and capital, K at a price of r = 60. a) What is the firm's Total...

Macroecon 3 3. The short-run cost function of a firm is given by C(q) = 200 + 55q, where C(q) or T C(q) is total cost, and q is the total quantity of output, both measured in thousands. (a) What is...

% Provide the solutions. 4. (20) Consider a version of the continuous time Mortensen-Pissarides labor market model with match- specific productivity. Labor force is normalized to 1, and there is a...

&& solve the attached questions.. 4. (20) Consider a version of the continuous time Mortensen-Pissarides labor market model with match- specific productivity. Labor force is normalized to 1, and...

1. Suppose Valcorp Enterprises is currently employing 600 laborers and 285 units of capital to produce its product. The wage rate is $ 10 0 , and capital rents are $1 2 0. The last laborer adds 5 0...

Instruction: For both questions show your steps carefully 1. Consider the following production function: Q=KL , where Q is output, K is capital and L is labor. Suppose the unit price of labor (W) and...

1. Consider the following production function: Q=KL , where Q is output, K is capital and L is labor. Suppose the unit price of labor (W) and Capital (r) are Birr 1 and 4 respectively. Based on this...

Suppose that a rm's production function of output Q is a function of only two inputs, labor (L) and capital (K), and can be written Q = 25LK. Letting the wage rate for labor be w and the rental rate...

Presented here is the comparative balance sheet for Perry Company at December 31. Additional information: 1. Operating expenses include depreciation expense $65,000 and charges from prepaid expenses...

Economic Service Life (ESL) A device that monitors rotational vibration changes in turbines may be purchased for use in S.C wind farms. The first cost is $40,000 with a constant AOC of $150,000 over...

What is the maximum collision rate in a healthy Ethernet LAN?

hi please show how to express a memorandum for the director of a care home critically discussing the advantages and disadvantages of two strategic planning models appropriate to the CARE SECTOR in...

2. Using a communication conflict you have been involved in, or a problem or phenomenon that you are familiar with, provide answers for a)d). a) Find the critical elements that existed (exist) as you...

5. What is meant by the statement, when we attribute a different meaning to a situation, the situation will consequentially change for us?

10. Using a conflict in your local community as your starting point, discuss how conflicts can be resolved using the following strategies: a) Making the cake bigger b) Providing compensation that is...