A firm has production function q = K¹/2L¹/2 and pays w = 8, r = 2. a. The firm produces qo = 2 units of output as lowest cost. Capital should be equal to b. At qo = 2, the Isocost Line will have a vertical intercept equal to C. The firm wishes to expand to q₁ = 4. In the short-run the firm cannot vary its capital. Labour should be equal to

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A:

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Short-Run Costs and Long-Run Costs

Cost of short-run and the long-run is an economic term that describes the cost involved in the production of goods in a firm in the short as well as long period.