A firm's production function takes the form: Q(L, K) = min{2L, 3K), where Q represents output and L and K represent labour and capital, respectively and where w and r give the prices of labour and capital. Assuming no other costs, what would be the marginal cost if the firm increased output by 1 unit? = Q( +/+ + + / -) O MC = 3w+2r 3w+2r O MC=3w+2r OMC = + O MC=2w+3r O MC =
A firm's production function takes the form: Q(L, K) = min{2L, 3K), where Q represents output and L and K represent labour and capital, respectively and where w and r give the prices of labour and capital. Assuming no other costs, what would be the marginal cost if the firm increased output by 1 unit? = Q( +/+ + + / -) O MC = 3w+2r 3w+2r O MC=3w+2r OMC = + O MC=2w+3r O MC =
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter7: Production And Cost In The Firm
Section: Chapter Questions
Problem 19PAE
Related questions
Question
Transcribed Image Text:A firm's production function takes the form: Q(L, K) = min{2L, 3K}, where Q represents output and L and K represent labour and capital, respectively and where w and r give the prices of labour
and capital. Assuming no other costs, what would be the marginal cost if the firm increased output by 1 unit?
O
O
MC = Q [ 12/2₁
= Q ( + 1/2 + 1/2 )
MC =
W
3r
3w+2r 3w+2r
+
O MC=3w+2r
O
W
r
= 21/1/2+1/1/3/2
O MC =2w+3r
MC=1/2
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
