A firm produces a product with labor and capital as inputs.

Homework Assistance Economics A firm produces a product with labor and capital as inputs.

Economics

A firm produces a product with labor and capital as inputs.

A firm produces a product with labor and capital as inputs. The production function is described by… Show more A firm produces a product with labor and capital as inputs. The production function is described by Q = LK. The marginal products associated with this production function are MPL = K and MPK = L. Let w = 1 and r = 1 be the prices of labor and capital, respectively. a. Find the equation for the firm’s long-run total cost curve as a function of quantity Q. b. Solve the firm’s short-run cost-minimization when capital is fixed at a quantity of 5 units (i.e. K ? = 5). Derive the equation for the firm’s short-run total cost curve as a function of quantity Q and graph it together with the long-run total cost curve. • Show less

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