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0.2 2. A seller's production function is q = f(k,1) = (kl), w = v = 1, and the competitive output price is P. a. Does the production function exhibit constant, increasing, or diminishing returns to scale? b. For part (b) only, suppose k is fixed at k, = 1 and labor is variable. Find the short run cost function C4). For all parts going forward, assume we are in the long run and all inputs are variable. c. Find the long run cost function C(q). d. Find conditional demand for labor.

0.2 2. A seller's production function is q = f(k,1) = (kl), w = v = 1, and the competitive output price is P. a. Does the production function exhibit constant, increasing, or diminishing returns to scale? b. For part (b) only, suppose k is fixed at k, = 1 and labor is variable. Find the short run cost function C4). For all parts going forward, assume we are in the long run and all inputs are variable. c. Find the long run cost function C(q). d. Find conditional demand for labor.

Microeconomic Theory
Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter10: Cost Functions
Section: Chapter Questions
Problem 10.7P
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0.2 2. A seller's production function is q = f(k,l) = (kl)", w = v = 1, and the competitive output price is P. a. Does the production function exhibit constant, increasing, or diminishing returns to scale? b. For part (b) only, suppose k is fixed at k, = 1 and labor is variable. Find the short run cost function C4). For all parts going forward, assume we are in the long run and all inputs are variable. c. Find the long run cost function C(q). d. Find conditional demand for labor.
Transcribed Image Text:0.2 2. A seller's production function is q = f(k,l) = (kl)", w = v = 1, and the competitive output price is P. a. Does the production function exhibit constant, increasing, or diminishing returns to scale? b. For part (b) only, suppose k is fixed at k, = 1 and labor is variable. Find the short run cost function C4). For all parts going forward, assume we are in the long run and all inputs are variable. c. Find the long run cost function C(q). d. Find conditional demand for labor.
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