Suppose that the market for apples is perfectly competitive. Production of apples requires two inputs: workers (L) and land (K). The production function for apples is: F(K,L)=3K^(1/3)* L^(2/3) A) Suppose that W=4, R=16, and in the short-run, K=27. Find the firm’s short-run cost function SRC(q) and short-run marginal cost function SRMC(q). B) What is the optimal production of apples if P=4? What are consumer surplus and profit? C) Find the firm’s short-run supply of apples Q(P) when W=4, R=16 and K=27.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question

Suppose that the market for apples is perfectly competitive. Production of apples requires two inputs:
workers (L) and land (K). The production function for apples is:
F(K,L)=3K^(1/3)* L^(2/3)


A) Suppose that W=4, R=16, and in the short-run, K=27. Find the firm’s short-run cost function SRC(q)
and short-run marginal cost function SRMC(q).
B) What is the optimal production of apples if P=4? What are consumer surplus and profit?
C) Find the firm’s short-run supply of apples Q(P) when W=4, R=16 and K=27.
D) Find the firm’s long-run cost function LRC(q) and long-run marginal cost function LRMC(q) when W=4
and R=16. How do these compare to the firm’s short-run cost function and marginal cost function?
E) Find the firm’s long-run supply of apples q(P) when W=4 and R=16.

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Profit Function
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.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education