Problem 3* A competitive firm has the following production function: f(L,K) = min {L, K}. Suppose the wage rate is 2, and the rental rate of capital is 4. (a) Derive the long-run cost function for the firm. (b) Calculate the long-run marginal cost curve and the average cost curve for the firm. (c) Write down the long-run supply function and graph the long-run supply curve for the firm.

Problem 3* A competitive firm has the following production function: f(L,K) = min {L, K}. Suppose the wage rate is 2, and the rental rate of capital is 4. (a) Derive the long-run cost function for the firm. (b) Calculate the long-run marginal cost curve and the average cost curve for the firm. (c) Write down the long-run supply function and graph the long-run supply curve for the firm.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

ChapterP2: Microeconomics Fundamentals

Section: Chapter Questions

Problem 13KC

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