0.2 2. A seller's production function is q = f(k,1) = (kl), w = v = 1, and the competitive output price is P. a. Does the production function exhibit constant, increasing, or diminishing returns to scale? b. For part (b) only, suppose k is fixed at k, = 1 and labor is variable. Find the short run cost function C4). For all parts going forward, assume we are in the long run and all inputs are variable. c. Find the long run cost function C(q). d. Find conditional demand for labor.

0.2 2. A seller's production function is q = f(k,1) = (kl), w = v = 1, and the competitive output price is P. a. Does the production function exhibit constant, increasing, or diminishing returns to scale? b. For part (b) only, suppose k is fixed at k, = 1 and labor is variable. Find the short run cost function C4). For all parts going forward, assume we are in the long run and all inputs are variable. c. Find the long run cost function C(q). d. Find conditional demand for labor.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

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0.2
2. A seller's production function is q = f(k,l) = (kl)", w = v = 1, and the competitive
output price is P.
a. Does the production function exhibit constant, increasing, or diminishing returns to
scale?
b. For part (b) only, suppose k is fixed at k, = 1 and labor is variable. Find the short
run cost function C4).
For all parts going forward, assume we are in the long run and all inputs are variable.
c. Find the long run cost function C(q).
d. Find conditional demand for labor.

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