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1. Sketching curves. Suppose that the production technology for our class restaurant changes (as depicted below). Our technology is such that we need to hire a minimum amount of labor LMIN before we can produce any meals. Moreover, suppose we are in the short run and our capital is fixed (K = K) and that the rental price of capital is r>0. Using the short run production function, illustrated below, sketch: (a) The marginal and average product curves. (b) The short run cost curve (label this curve TCK-K). (c) The marginal and average cost curves. Production Function $ q/L 0 LMIN TPK 0 $/91 I q

1. Sketching curves. Suppose that the production technology for our class restaurant changes (as depicted below). Our technology is such that we need to hire a minimum amount of labor LMIN before we can produce any meals. Moreover, suppose we are in the short run and our capital is fixed (K = K) and that the rental price of capital is r>0. Using the short run production function, illustrated below, sketch: (a) The marginal and average product curves. (b) The short run cost curve (label this curve TCK-K). (c) The marginal and average cost curves. Production Function $ q/L 0 LMIN TPK 0 $/91 I q

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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1. Sketching curves. Suppose that the production technology for our class restaurant changes (as depicted below). Our technology is such that we need to hire a minimum amount of labor LMIN before we can produce any meals. Moreover, suppose we are in the short run and our capital is fixed (K = K) and that the rental price of capital is r>0. Using the short run production function, illustrated below, sketch: (a) The marginal and average product curves. (b) The short run cost curve (label this curve TCK-K). (c) The marginal and average cost curves. Production Function $ q/L 0 LMIN TPK 0 $/91 I q
Transcribed Image Text:1. Sketching curves. Suppose that the production technology for our class restaurant changes (as depicted below). Our technology is such that we need to hire a minimum amount of labor LMIN before we can produce any meals. Moreover, suppose we are in the short run and our capital is fixed (K = K) and that the rental price of capital is r>0. Using the short run production function, illustrated below, sketch: (a) The marginal and average product curves. (b) The short run cost curve (label this curve TCK-K). (c) The marginal and average cost curves. Production Function $ q/L 0 LMIN TPK 0 $/91 I q
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