A firm has a Cobb-Douglas production function, q=2L0.5K0.5 . If it faces factor prices of w=20 and r=40 and its capital is fixed at K=100, what are its short-run average fixed cost, average variable cost, and marginal cost functions? Plot these curves
A firm has a Cobb-Douglas production function, q=2L0.5K0.5 . If it faces factor prices of w=20 and r=40 and its capital is fixed at K=100, what are its short-run average fixed cost, average variable cost, and marginal cost functions? Plot these curves
Chapter10: Cost Functions
Section: Chapter Questions
Problem 10.3P
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A firm has a Cobb-Douglas production function, q=2L0.5K0.5 . If it faces factor prices of w=20 and r=40 and its capital is fixed at K=100, what are its short-run average fixed cost,
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