A firm has the following Cobb-Douglas production function:         q=(L^α)(K^1-α) 0<α < 1 is a parameter. Suppose in the short run K = 1. The rental rate of a unit of K is $10, and the wage rate of a unit of L is $20. (a) Derive the marginal cost of the firm (expressed in terms of α and q). (b) Derive the average variable cost of the firm (expressed in terms of α and q). (c) Derive the cost function of the firm.

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A:

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A: Answer -

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