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(4) w = 3. firm's production function is F(K, L) = 2√/K + L. Factor prices are r = 2 and (a) Find an Expressions for MPL, MPK, and MRT SLK- (b) What sort of returns to scale does this production function have? (e) Show that the firm's LR total cost function is CLR(q) =q². (Hint: Find LR Factor Demands

(4) w = 3. firm's production function is F(K, L) = 2√/K + L. Factor prices are r = 2 and (a) Find an Expressions for MPL, MPK, and MRT SLK- (b) What sort of returns to scale does this production function have? (e) Show that the firm's LR total cost function is CLR(q) =q². (Hint: Find LR Factor Demands

Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter4: Extent (how Much) Decisions
Section: Chapter Questions
Problem 3MC
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firm's production function is F(K, L) = 2√K + L. Factor prices are r = 2 and (4) w = 3. (a) Find an Expressions for MPL, MPK, and MRT SLK. (b) What sort of returns to scale does this production function have? (c) Show that the firm's LR total cost function is CLR(q) =q². (Hint: Find LR Factor Demands first.) (d) Show that when K = 4, CSR(q) = ~ 8 q² - 4 if q ≥ 4 if q ≤ 4 (e) Write out expressions for SR AC and mc. (Be sure to take account of the kink in the expression for CSR.)
Transcribed Image Text:firm's production function is F(K, L) = 2√K + L. Factor prices are r = 2 and (4) w = 3. (a) Find an Expressions for MPL, MPK, and MRT SLK. (b) What sort of returns to scale does this production function have? (c) Show that the firm's LR total cost function is CLR(q) =q². (Hint: Find LR Factor Demands first.) (d) Show that when K = 4, CSR(q) = ~ 8 q² - 4 if q ≥ 4 if q ≤ 4 (e) Write out expressions for SR AC and mc. (Be sure to take account of the kink in the expression for CSR.)
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