a) What is the Long-run cost function if the production function is q = L+ K ? b) Many marginal cost curves are U-shaped. As a result, it is possible that the MC curve hits the demand or price line at two output levels. Which is the profit maximizing output? Why?
a) What is the Long-run cost function if the production function is q = L+ K ? b) Many marginal cost curves are U-shaped. As a result, it is possible that the MC curve hits the demand or price line at two output levels. Which is the profit maximizing output? Why?
Chapter22: Supply: The Costs Of Doing Business
Section: Chapter Questions
Problem 10E
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Transcribed Image Text:7)
a) What is the Long-run cost function if the production function is q = L+ K ?
b) Many marginal cost curves are U-shaped. As a result, it is possible that the MC curve hits
the demand or price line at two output levels. Which is the profit maximizing output?
Why?
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