Question: Suppose we have a linear production function F(L,K)=5L+2K. The prices of labor and capital are w=2 and r=10. a. Prove that this production function

Suppose we have a linear production function F(L,K)=5L+2K. The prices of labor

Suppose we have a linear production function F(L,K)=5L+2K. The prices of labor and capital are w=2 and r=10. a. Prove that this production function exhibits the constant return to scale. b. Find the long-run cost function of the firm. c. If price of capital drops to 4, what would be the long-run cost function.

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