Step by Step Solutions

[All Steps] Consider a firm with the following production function: Q = F(K, L) = L 2 K 2 where K is the amount of capital and L is the amount of labor used

Question: Consider a firm with the following production function:

Q = F(K, L) = L 2 K 2

where K is the amount of capital and L is the amount of labor used in production. w is the wage for labor and r is the rental rate of capital.

  1. In the long-run, what is the cost minimizing level of capital and labor?
  2. When w=80 and r=80, what is the firm’s long-run total cost? What is its long-run

average cost?

Price: $2.99
Solution: The downloadable solution consists of 2 pages
Deliverable: Word Document


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