1. A firm producing hockey sticks has a production function given byq = 2VklThe price of labor is "w", the price of capital is "v". If the capital used forproducing hockey sticks is fixed at "k1" in the short run. The short run costwq?+ vk,4k1function is SC =a. Given q, w, and v, how should the capital stock "k1" be chosen tominimize total cost?b. Use your results from part (a) to calculate the long-run total cost of hockeystick production.

Given information q=2KL Price of labor=W Price of capital=V Short run cost function SC=Wq24K1+VK1…

1. A firm producing hockey sticks has a production function given by q = 2Vkl The price of labor is "w", the price of capital is "v". If the capital used for producing hockey sticks is fixed at "k1" in the short run. The short run cost wą? + vk, 4k1 function is SC = a. Given q, w, and v, how should the capital stock "k1" be chosen to minimize total cost? b. Use your results from part (a) to calculate the long-run total cost of hockey stick production.

1. A firm producing hockey sticks has a production function given by q = 2Vkl The price of labor is "w", the price of capital is "v". If the capital used for producing hockey sticks is fixed at "k1" in the short run. The short run cost wą? + vk, 4k1 function is SC = a. Given q, w, and v, how should the capital stock "k1" be chosen to minimize total cost? b. Use your results from part (a) to calculate the long-run total cost of hockey stick production.

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter7: Production And Cost In The Firm

Section: Chapter Questions

Problem 3.9P

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