A firm with Perfect Competition in the Labour Market and Perfect Competition in the Output Market. (Long Run) You are the manager of a business that faces perfect competition in the output market and perfect competition in the labour market. The production function of the business is given by: Q = 2K0.25L 0.50. The price of the product is $100. The wage rate is $5 and the price of capital is $10. a) Find an equation that describes the relationship between the optimal level of labour and capital. b) Draw a diagram of the solutions.c) Explain your approach in words

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Short-Run Costs and Long-Run Costs

Cost of short-run and the long-run is an economic term that describes the cost involved in the production of goods in a firm in the short as well as long period.