) Assume that the output of a company is given by y (K, L) = K^0.5 * L^0.5, where the amount of capital on short term is given by K = 1 and wage costs are given by w = 1. Calculate and illustrate them average variable costs and marginal costs (marginal costs). b) In addition, assum
) Assume that the output of a company is given by y (K, L) = K^0.5 * L^0.5, where the amount of capital on short term is given by K = 1 and wage costs are given by w = 1. Calculate and illustrate them average variable costs and marginal costs (marginal costs). b) In addition, assum
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
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Chapter7: Production And Cost In The Firm
Section: Chapter Questions
Problem 19PAE
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a) Assume that the output of a company is given by y (K, L) = K^0.5 * L^0.5, where the amount of capital on short
term is given by K = 1 and wage costs are given by w = 1. Calculate and illustrate them
b) In addition, assume that the price of capital is given by r = 1. Calculate the
the costs
you found in a). Comment on what you find.
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