Using the production function q = (z," + z2)2/a for a manufacturing firm, where z; denotes labor, zz denotes capital and a denotes a constant parameter, derive the ) conditional factor demand functions and (i) cost function. If a/la-1) - +1 then show that the cost function will take a very simple form. Briefly explain how market regulators can make use of the cost function for this firm.

Using the production function q = (z," + z2)2/a for a manufacturing firm, where z; denotes labor, zz denotes capital and a denotes a constant parameter, derive the ) conditional factor demand functions and (i) cost function. If a/la-1) - +1 then show that the cost function will take a very simple form. Briefly explain how market regulators can make use of the cost function for this firm.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Suppose in the long-rung the production function of a competitive firm is Q=f(L,K)= L1/5 K 1/2 , where L is the amount of labor and K is the amount of capital. The cost per unit of labor is w and the cost of capital is r, which is the interest rate. The price per unit of output is p. Derive unconditional factor demand functions.
A5
(This is a single question with five parts to the answer. I would appreciate help with all five parts if possible. Image screenshot of the original question with the formulas more easily readable than can be identified here is attached) Tech firms produce goods and services from labor and energy. The total cost in dollars to produce y amount of goods and services for each firm j is cj(yj) = yi2. There are 100 identical tech firms which all behave competitively. What is the individual supply of technological goods and services? What is the market supply of technological goods and services? Suppose the demand curve for these goods is D(p)=200-50p. What is the equilibrium price and quantity sold? How much is the total surplus of this economy? Now suppose that the industry makes a one-time investment for $K amount of dollars to innovate in a new technology of production that allows every firm to reduce its cost of production to a 1/4 fraction of the previous cost. What is the new total…
Assume a firm has the following short-run production function: q(L) = L+6L2-1/2L3 If this firm is going to maximize profits in the short-run by producing a strictly positive level of output (q>0), what is the lowest level of labor (L) they would employ? A.) Minimum L=?
Please answer in detail according to the picture. Show that the cost function is homogeneous of degree 1/(α+β) in output. How do the returns to scale (degree of homogeneity of the production function) relate to the propertiesof the cost function? Does this make sense to you? Explain clearly why.
solve this one
The short run production function of a competitive firm is given The short-run production function of a competitive firm is given by f (L) = 6L2/3, where L is the amount of labor it uses. (For those who do not know calculus—if total output is aLb, where a and b are constants, and where L is the amount of some factor of production, then the marginal product of L is given by the formula abLb−1.) The cost per unit of labor is w = 6 and the price per unit of output is p = 3. (a) Plot a few points on the graph of this firm’s production function and sketch the graph of the production function, using blue ink. Use black ink to draw the isoprofit line that passes through the point (0, 12), the isoprofit line that passes through (0, 8), and the isoprofit line that passes through the point (0, 4). What is the slope of each of the isoprofit lines? (b) How many units of labor will the firm hire? (c) Suppose that the wage of labor falls to 4, and the price of output…
Assume that the production function for competitive firm is given by F(L)=9L1/3, where L is the number of units of labour used in the production process. Suppose that the cost per unit of labor is $3 and the price of output is $9 per unit, how many units of labor will the firm hire?
A competitive firm’s production function is given by y= f(x1,x2)=x1ax2b If a=b=0.5 , the price of factor 1 is 12, and the price of factor 2 is 3, find the cost minimizing input combinations and the total cost of producing 40 units of output. Redo part (1), this time by first deriving the firm’s conditional factor demand functions and the cost function.
Can you please help solve question 9 a,b and c please show full working so I can compare it to my own work Thank you
2. A company has the following product function. x= f(N, Κ )-N05K0.5 The price per unit of labor is NOK 200. The price per unit of capital is NOK 800. Find the company's cost function C (x).
3