A company A can produce widgets according to Q=5K 3/4 L 1/4 where Q is the output
Fantastic news! We've Found the answer you've been seeking!
Question:
A company A can produce widgets according to Q=5K3/4L1/4 where Q is the output of widgets, and K, L are quantities of capital and labor used.
- Are there constant, increasing or decreasing returns to scale in widget production? Explain.
- Are there, constant, increasing or decreasing marginal products of factors? Explain
- In the short run, the amount of capital used by company A. is fixed. Derive the short-run cost function. (Note that the short-run cost function will show C as a function of Q, K and the factor prices w and r.)
- Derive the long-run cost function.
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: