8.11. A firm produces a product with labor and capi-tal as inputs. The production function is described byQ = LK. The marginal products associated with thisproduction function are MP, = K and MP = L. Letw = 1 and r = 1 be the prices of labor and capital,respectively.a) Find the equation for the firm's long-run total costcurve as a function of quantity Q.b) Solve the firm's short-run cost-minimization problemwhen capital is fixed at a quantity of 5 units (i.e., K = 5).Derive the equation for the firm's short-run total costcurve as a function of quantity Q and graph it togetherwith the long-run total cost curve.c) How do the graphs of the long-run and short-runtotal cost curves change when w = 1 and r = 4?d) How do the graphs of the long-run and short-runtotal cost curves change when w = 4 and r = 1?

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A firm produces a product with labor and capi- inputs. The production function is described by LK. The marginal products associated with this uction function are MP, = K and MP = L. Let 1 and r = 1 be the prices of labor and capital, ectively. nd the equation for the firm's long-run total cost as a function of quantity Q. olve the firm's short-run cost-minimization problem capital is fixed at a quantity of 5 units (i.e., K = 5). ve the equation for the firm's short-run total cost as a function of quantity Q and graph it together the long-run total cost curve. ow do the graphs of the long-run and short-run cost curves change when w = 1 and r = 4? ow do the graphs of the long-run and short-run cost curves change when w = 4 and r = 1?

A firm produces a product with labor and capi- inputs. The production function is described by LK. The marginal products associated with this uction function are MP, = K and MP = L. Let 1 and r = 1 be the prices of labor and capital, ectively. nd the equation for the firm's long-run total cost as a function of quantity Q. olve the firm's short-run cost-minimization problem capital is fixed at a quantity of 5 units (i.e., K = 5). ve the equation for the firm's short-run total cost as a function of quantity Q and graph it together the long-run total cost curve. ow do the graphs of the long-run and short-run cost curves change when w = 1 and r = 4? ow do the graphs of the long-run and short-run cost curves change when w = 4 and r = 1?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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