Suppose a firm has production function F(L, K) = L6K.6. Following the steps in the slides, derive this firm's long run cost function C(q) when w = 15 and r = 8. Also derive the firm's long run marginal cost C'(Q). Why is the firm's long run marginal cost decreasing?

Suppose a firm has production function F(L, K) = L6K.6. Following the steps in the slides, derive this firm's long run cost function C(q) when w = 15 and r = 8. Also derive the firm's long run marginal cost C'(Q). Why is the firm's long run marginal cost decreasing?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter10: Cost Functions

Section: Chapter Questions

Problem 10.3P

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Question

Suppose a firm has production function F(L, K) = L-6K-6. Following the steps in
the slides, derive this firm's long run cost function C(q) when w = 15 and r = 8. Also
derive the firm's long run marginal cost C'(Q). Why is the firm's long run marginal
cost decreasing?

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