R 12-2 A Japanese synthetic rubber manufacturer's production function is q = 10-L05 K Suppose that its wage, w, is $11 per hour and the rental cost of capital, r, is $44. What is the equation of the long-run cost function and the conditional factor demands? Consider that MP 5- and MPR = 5. L06

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
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Chapter10: Cost Functions
Section: Chapter Questions
Problem 10.7P
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R 12-2
A Japanese synthetic rubber manufacturer's production function is q 10-L5 K05, Suppose
that its wage, w, is $11 per hour and the rental cost of capital, r, is $44. What is the equation
of the long-run cost function and the conditional factor demands?
K05
Consider that MP =5-
and MPK
%3D
L05
=5
R 12-3
Consider the following production function: q= 100 L08. K4. Currently the wage rate (w)
is $8 and the price of capital (r) is $2. If the firm is using 200 units of capital in production,
how much labor should be employed to minimize costs?
%3D
K04
Consider that MPL = 80 -
and MPK
=40.
Transcribed Image Text:R 12-2 A Japanese synthetic rubber manufacturer's production function is q 10-L5 K05, Suppose that its wage, w, is $11 per hour and the rental cost of capital, r, is $44. What is the equation of the long-run cost function and the conditional factor demands? K05 Consider that MP =5- and MPK %3D L05 =5 R 12-3 Consider the following production function: q= 100 L08. K4. Currently the wage rate (w) is $8 and the price of capital (r) is $2. If the firm is using 200 units of capital in production, how much labor should be employed to minimize costs? %3D K04 Consider that MPL = 80 - and MPK =40.
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