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q(L, K) = L²/2 . K²/2 dditionally, assume that, in the short-run, the firm has already invested in 1 unit of capital (K = 1) and paid i $1 to do so (F = 1). Finally, assume that the firm must pay a wage of $1 (w = 1) for each unit of labor (L) re.

q(L, K) = L²/2 . K²/2 dditionally, assume that, in the short-run, the firm has already invested in 1 unit of capital (K = 1) and paid i $1 to do so (F = 1). Finally, assume that the firm must pay a wage of $1 (w = 1) for each unit of labor (L) re.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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1. Assume a firm has the following production function: q(L, K) = L²/2.K/2 Additionally, assume that, in the short-run, the firm has already invested in 1 unit of capital (K = 1) and paid a cost of $1 to do so (F = 1). Finally, assume that the firm must pay a wage of $1 (w = 1) for each unit of labor (L) they hire. A) Solve for the firm's short-run supply function (q* (p)) that specifies the firm's profit maximizing level of output for any price (p).
Transcribed Image Text:1. Assume a firm has the following production function: q(L, K) = L²/2.K/2 Additionally, assume that, in the short-run, the firm has already invested in 1 unit of capital (K = 1) and paid a cost of $1 to do so (F = 1). Finally, assume that the firm must pay a wage of $1 (w = 1) for each unit of labor (L) they hire. A) Solve for the firm's short-run supply function (q* (p)) that specifies the firm's profit maximizing level of output for any price (p).
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