Question: Please find the question in the three attachments. Please answer all 4 parts a) b) c) and d) and give full step-by-step detailed procedures. Firm
Please find the question in the three attachments. Please answer all 4 parts a) b) c) and d) and give full step-by-step detailed procedures. Firm A's monthly production data is available in the third picture of the chart. Please answer carefully with correct answers and explanations. Will rate helpful!



Suppose Firm A's production technology can be best described by the following Cobb-Douglas production function: q(L, K) = c . La . KB where L is the labour input (measured in hours) and K is the capital input. The wage per hour is $20 and the unit cost of capital is $4,000/month. Firm A is currently using 3 units of capital (i.e., K = 3). Note: Please round all estimated coefficients and your final numbers to 1 decimal place.a} Use Firm A's production data to estimate its Cobb-Douglas production function. Include the regression results from Excel in your answer. {5 points} b) Use your estimated production inction from part (a) to derive Firm A's average product of capital and marginal product of capital when L = 300 and K = 3. 1What is the economic meaning of these two numbers? (4 points} c} In the short nm when capital is xed at 3 units, how many hours of labour does Firm A need to produce 13,000 units of output? What is then Firm A's total cost of production? {3 points) d} In the long mm when capital is variable, how many hours of labour and units of capital should Firm A use to minimize the cost of producing 13,000 units of output? What is then Firm A's total cost of production? Note: For your calculations carry 4 digits to the right of the decimal point. Then round your final numbers (optimal labour and capital inputs) to 1 decimal place (i. c. ,you don' t need to round the optimal capital input to a whole number). (3 points} \f
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
