Suppose that firm's technology is given by the following production function: Q(K,L)-L2K12 The prices of inputs...

 

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Suppose that firm's technology is given by the following production function: Q(K,L)-L2K12 The prices of inputs are w = 2 and r = 2. a) Does this production function exhibit increasing, decreasing or constant returns to scale? Prove your answer. b) Derive the equation of firm's long-run total cost curve (TC(y)), the long-run average cost curve (AC(y)), and the long-run marginal cost curve (MC(y)). Suppose that firm's technology is given by the following production function: Q(K,L)-L2K12 The prices of inputs are w = 2 and r = 2. a) Does this production function exhibit increasing, decreasing or constant returns to scale? Prove your answer. b) Derive the equation of firm's long-run total cost curve (TC(y)), the long-run average cost curve (AC(y)), and the long-run marginal cost curve (MC(y)).