A firm has a production function given by Q= ALα Kβ and per unit price of capital (K) and Labour (L) are r and w respectively.Find the Marginal Rate of Technical substitution for capital for this firmIf the firm seeks to minimize its cost and its in the short run of production such that K = K, find L and the short run cost functionSuppose that the firm can now change all its inputs and it seeks to minimize its cost. Find the input demand functions of K and L; as well as the long run cost function

The production function of the firm is, Q = A(L^?)*(K^ꞵ) The marginal product (MPL) of labor is,…

Answered: A firm has a production function given…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A firm has a production function given by Q= AL^α K^β and per unit price of capital (K) and Labour (L) are r and w respectively.

Find the Marginal Rate of Technical substitution for capital for this firm
If the firm seeks to minimize its cost and its in the short run of production such that K = K, find L and the short run cost function
Suppose that the firm can now change all its inputs and it seeks to minimize its cost. Find the input demand functions of K and L; as well as the long run cost function

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