5. A firm produces widgets with production function: q=2/KL. In the short run, the firm's amount...

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5. A firm produces widgets with production function: q=2√/KL. In the short run, the firm's amount of capital is fixed at K = 100. The rental rate is v= 1 and the wage for L is w = 4. (a) Find the firm's short-run total cost curve (SRTC), short-run average cost curve (SRAC), and the short-run marginal cost (SMC) function. (b) Graph the firm's SAC and SMC using the following levels of production: q=25 and 9=100. (c) Find the firm's total cost curve as a function of q, w, v, and K₁. (d) What level of K should be chosen to minimize total cost (note: K will be a function of q,w, v)? I (e) Use the above results to calculate the long-run total cost of production. 5. A firm produces widgets with production function: q=2√/KL. In the short run, the firm's amount of capital is fixed at K = 100. The rental rate is v= 1 and the wage for L is w = 4. (a) Find the firm's short-run total cost curve (SRTC), short-run average cost curve (SRAC), and the short-run marginal cost (SMC) function. (b) Graph the firm's SAC and SMC using the following levels of production: q=25 and 9=100. (c) Find the firm's total cost curve as a function of q, w, v, and K₁. (d) What level of K should be chosen to minimize total cost (note: K will be a function of q,w, v)? I (e) Use the above results to calculate the long-run total cost of production.

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ShortRun Cost Analysis for Widget Production a ShortRun Cost Curves ShortRun Total Cost SRTC Since c... View the full answer