You are the owner of a factory that produces brownies. the production function for brownies for...
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You are the owner of a factory that produces brownies. the production function for brownies for your firm is F(K.L )= (K^1/2 + L^1/2)^2. Workers in your factory receive a wage w=1 and the rental rate of capital r=1. (Hint: for this question, plugging in w=1 and r=1 sooner than later will save you some time with your algebra). a. Find the optimal amount of capital and labor that this firm should hire if it wants to minimize its cost to produce q units of output. b. solve for the cost function in terms of quantity q, given that your firm is free to choose both labor and capital. c. what is the firm marginal cost d. what is your firm's average total cost? You are the owner of a factory that produces brownies. the production function for brownies for your firm is F(K.L )= (K^1/2 + L^1/2)^2. Workers in your factory receive a wage w=1 and the rental rate of capital r=1. (Hint: for this question, plugging in w=1 and r=1 sooner than later will save you some time with your algebra). a. Find the optimal amount of capital and labor that this firm should hire if it wants to minimize its cost to produce q units of output. b. solve for the cost function in terms of quantity q, given that your firm is free to choose both labor and capital. c. what is the firm marginal cost d. what is your firm's average total cost?
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Answer rating: 100% (QA)
q F KL K05 L05 Total cast C WL k LK a cost is minimized when MPL MPx wx 11 1 MPL 22 2... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Posted Date:
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