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A firm faces a production function with inputs capital (K) and labor (L): F(K, L) = K¹/2 1/4 The amount of capital used for production is determined at the beginning of the year. The prices of K and L are v and w respectively.

A firm faces a production function with inputs capital (K) and labor (L): F(K, L) = K¹/2 1/4 The amount of capital used for production is determined at the beginning of the year. The prices of K and L are v and w respectively.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter7: Production Economics
Section: Chapter Questions
Problem 5E
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A firm faces a production function with inputs capital (K) and labor (L): F(K, L) = K¹/² [1/4 The amount of capital used for production is determined at the beginning of the year. The prices of K and L are v and w respectively.
Transcribed Image Text:A firm faces a production function with inputs capital (K) and labor (L): F(K, L) = K¹/² [1/4 The amount of capital used for production is determined at the beginning of the year. The prices of K and L are v and w respectively.
What is the short-run cost function for a given quantity q, given that the owner purchased K amount of capital at the beginning of the year? C's (q, w, v, K) = vŘ¹/2 +w. qª Ř² Cs (q, w, v, K) = vK¹/2 + w K qª Cs (q, w, v, K) = vK + w- K 4 Cs (q, w, v, K) = vK +w- qª K²
Transcribed Image Text:What is the short-run cost function for a given quantity q, given that the owner purchased K amount of capital at the beginning of the year? C's (q, w, v, K) = vŘ¹/2 +w. qª Ř² Cs (q, w, v, K) = vK¹/2 + w K qª Cs (q, w, v, K) = vK + w- K 4 Cs (q, w, v, K) = vK +w- qª K²
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