Question: Please help? Question 2. Firm Optimization Let's play hypothetical here. Immag'ine you're the founder of a quale factory and you are consid ering your company's

Please help?

Please help? Question 2. Firm Optimization Let's play hypothetical here. Immag'ine you're

Question 2. Firm Optimization Let's play hypothetical here. Immag'ine you're the founder of a quale factory and you are consid ering your company's long-run options for production. You can either build your factory in London, with access to the larger wizarding labor market, or in Hogsmeade with its wizardingspecic zon- ing and low rental costs. The production function is q = LaK", regardle of where the factory is located. Labor is in worker-hours and capital is in leather processing machines. Part 3) Find an exprusion for the rm's M RTS. Part b) Using whatever method you prefer, nd expressions for the cost minimizing levels of L and K and the rm's long-run cost function C(w,r, (i), all in terms of prices 11), 'r, and quantity (2. Part c) Assume that a = %, b = g, regardless of where you locate the plant. If the rm locates in Hogsmeade, the rm will have to pay a wage, to = $5, and a cost of capital of r = $10. If it locates the plant in London it would have to pay higher wages, w = $36, but the cost of capital would be lower, r = $9. Given the rm expects to produce 1000 units of output regardless of the location chosen, what are the cost minimizing L and K (it is ne to have fractional units of labor and capital) for each location, and in which city can the rm produce at the lowest cost

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