2) Craft Corp.'s production function is given by q = 5min(K, 2L), where q is the quantity produced and K and L are the amounts of capital and labor input. Input prices are r = 2 and w = 6. a) Find Craft Corp's long-run cost function. b) Draw Craft Corp's Long isoquants and isocost and show the equilibrium when q = 2000. What is the total cost to produce q = 2000? What is the labor cost to produce q = 2000? What is the capital cost to produce q = 2000? c) Suppose in the short run K is fixed at 20. Find Craft Corp's short-run cost function. Represent both, the short-run and the long-run cost function in a diagram.

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Short-Run Costs and Long-Run Costs

Cost of short-run and the long-run is an economic term that describes the cost involved in the production of goods in a firm in the short as well as long period.