Question: A firm has a production function given by. Suppose that each unit of capital costs R and each unit of labor costs W . a.

A firm has a production function given by. Suppose that each unit of capital costsRand each unit of labor costsW.

a. Derive the long-run demands for capital and labor.

b. Derive the total cost curve.

c. Derive the long-run average and marginal cost curves.

d. How do marginal and average costs change with increases in output? Explain.

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