Consider the following Cobb-Douglas production function: Y = 10L04K04. Suppose that the price of labor is w = 20 and the price of capital if r = 40. a- Derive the total cost curve for this production function. b- Derive the marginal cost curve for this production function. c- Plot the marginal and total cost curves for q = 1,2,3,4,5. What does it tell you about economies of scale for the production function? d- Suppose that the wage rate went up from 20 to 30. What would happen to the total wage bill relative to total costs, wL ;? What would happen to total costs? wL+rk*

Question
Consider the following Cobb-Douglas production function: Y = 10L04K04. Suppose that the
price of labor is w = 20 and the price of capital if r = 40.
a- Derive the total cost curve for this production function.
b- Derive the marginal cost curve for this production function.
c- Plot the marginal and total cost curves for q = 1,2,3,4,5. What does it tell you about
economies of scale for the production function?
d- Suppose that the wage rate went up from 20 to 30. What would happen to the total
wage bill relative to total costs,
wL
;? What would happen to total costs?
wL+rk*
Expand
Transcribed Image Text

Consider the following Cobb-Douglas production function: Y = 10L04K04. Suppose that the price of labor is w = 20 and the price of capital if r = 40. a- Derive the total cost curve for this production function. b- Derive the marginal cost curve for this production function. c- Plot the marginal and total cost curves for q = 1,2,3,4,5. What does it tell you about economies of scale for the production function? d- Suppose that the wage rate went up from 20 to 30. What would happen to the total wage bill relative to total costs, wL ;? What would happen to total costs? wL+rk*

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Economics

Microeconomics

Related Economics Q&A

Find answers to questions asked by students like you.

Q: What is the IUPAC name for the compound shown? Step 1: Identify the number of carbons in the longest...

A: Longest chain = 10 carbons  Base name = decane  Methyl groups at 2nd and 3rd position Ethyl group at...

Q: The probabilities of contamination In medicine capsules from the presence of heavy metals and differ...

A: Given:     Heavy Metal Contamination Microbial Contamination from E. Coli Microbial Contamination...

Q: d 1 through 70. What is the probability that a student will enter a building that is not a multiple ...

A: To find:  The probability that a student will enter a building that is not a multiple of 12.  

Q: Fortune magazine's list of the world's most admired companies for 2014is provided in the data contai...

A: Fortune magazine's list of the world's most admired companies for 2014is provided in the data contai...

Q: the bank. If A represents the amount of money and d stands for the number of days then A(d)=2+0.25d ...

A: According to the guidelines issued by the company We are supposed to answer only first three subpart...

Q: Use the table to the right to answer the following question. Energy Item (Joules) Compare the energy...

A: Click to see the answer

Q: At the physiological pH in the human body, amino acids are typically in the zwitterionic form. What ...

A: The amino acid's structure comprises of a carboxyl functional group and an amino group. These groups...

Q: The ecology club at a local high school took separate random samples of sophomores, juniors, and sen...

A: The club performed a chi-square test for homogeneity across the three grade levels. Let p1 is the pr...

Q: Assume gadgets are sold in a competitive market, the equilibrium price is $6, and the equilibrium qu...

A: Given  Gadgets are sold in a competitive market.  The equilibrium price is $6.  The equilibrium quan...

Q: Identify the following samples of matter as macroscopic, microscopic, or particulate: (a) a human sk...

A: Macroscopic: substances which can be seen by naked eye. Microscopic: substances which are tiny and c...

Q: The following incomplete balance sheet for the Sanderson Manufacturing Company was prepared by the c...

A: Classified balance sheet is an indicator of financial position which shows all assets and liabilitie...

Q: consider the equations g(x)=log(x+5) and h(x)=−x−6. To the nearest tenth, what is the solution of g(...

A: Given that g(x)=log(x+5) and h(x)=−x−6. To the nearest tenth, what is the solution of g(x)=h(x)?

Q: Within a population of sunflowers, a new individual has a novel dominant mutation that causes it to ...

A: Within a population of sunflowers, a new individual has a novel dominant mutation that causes it to ...

Q: 4) Tom has a cube, a rectangular prism, and a triangular prism. Which of his shapes have more than 6...

A: In this question we have to tell which shape has more than 6 vertices.

Q: 12. Which material would be least effective at preventing sound from escaping a room? a. Glass b. Fo...

A: Option (B) 

Q: Modern commercial airliners are largely made of aluminum, a light and strong metal. But the fact tha...

A: Step by step solution is given below:

Q: A jet airplane reaches 675./kmh on a certain flight. How long does it take to cover 291.m? Set the m...

A: Given that the velocity is 675 km/h. The given velocity has to be converted to m/h

Q: he cerebrum is divided into two integrated cerebral hemispheres. Messages are freely and instantly e...

A: A study of patients with split brain, led Roger Sperry to introduce the left brain right brain theor...

Q: Tech Solutions is a consulting firm that uses a job-order costing system. Its direct materials consi...

A: The predetermined overhead rate refers to the rate estimated at the beginning of the period to charg...

Q: A walking path across a park is represented by the equation y= -2x-7. A new path will be built perpe...

A: Click to see the answer

Q: The cells shown in the image are from a rare species of plant and illustrate different stages of mit...

A: Cell division is an important process that helps to keep the cells growing in number. This enables a...

Q: 1. Make a frequency distribution for the following data of inches of rainfall in Brooklyn per year, ...

A: b) A histogram is a pictorial way of representing the distribution of data. It denotes the frequency...

Q: A half-life is the amount of time it takes for a substance or entity to fall to half its original va...

A: A half-life is the amount of time it takes for a substance or entity to fall to half its original va...

Q: Why is it useful for historians to craft historical narratives? O A. Narratives cannot be changed by...

A: Narrative history is the way of writing history in a story-telling form. It encourage to entail hist...

Q: Financial statementsThe assets and liabilities of Global Travel Agency on December 31, 20Y5. and its...

A: ''Since you have posted a question with multiple parts, we will solve the first three sub-parts for ...

Q: The Coca-Cola Company is one of the world's leading manufacturers, marketers, and distributors of no...

A:   Cash flow statements : It  reports the cash flow activities in a company for the given accounting ...

Q: Multiple-step income statement and balance sheetThe following selected accounts and their current ba...

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts fo...

Q: 10 ft 8 ft 6 ft Find the outer perimeter of this figure. Round your answer to the nearest hundredth....

A: The parameter of the given figure is: P=Hypotenuse of the triangle + base of the triangle +perimeter...

Q: How many glasses like the one shown can be filled three-quarters full from a pitcher holding 150 cub...

A: Click to see the answer

Q: Oahu Kiki tracks the number of units purchased and sold throughout each accounting period but applie...

A: FIFO is the method of valuation of inventory in which the earliest inventory hold by the organizatio...

Q: 2. Divisibility Of Strings As part of an assignment, a student is required to find whether a given s...

A: GIVEN:

Q: Consider the following regular decagon. Choose the correct card to fill in the blanks below. 30 36° ...

A: the solution is given below.

Q: income statement

A: Company prepares a financial statement at the end of year to calculate its net loss or net profit ea...

Q: 2. Label the photograph of the kidney model by selecting the letter for the correct structure from t...

A: The kidney are the main filtration organs of the Excretory system present in the Body. There are a p...

Q: Part 2: Meredith Ward is the assistant chief accountant at Frazier Company, a manufacturer of comput...

A: Financial statement is the statement which present the profit and loss of the entity and the financi...

Q: Fantastique Bikes is a company that manufactures bikes a monopolistically competitive market. The fo...

A: Answer: A monopolistically competitive firm maximizes its profit where the marginal revenue is equal...

Q: Let X equal the set of countries who have won fewer than 800 medals overal. Write the set X usirg th...

A: Countries with medal less than 800 in descending order : Germany (G) France (F) Italy (I) Sweden (S)...

Q: For each of the following pieces of glassware, provide sample measurement and discuss the number of ...

A: Volumes readings are estimated to one decimal place past the markings on the glassware. The assumed ...

Q: How would the dx2−y2dx2−y2 orbital in the n=5n=5 shell compare to the dx2−y2dx2−y2 orbital in the n=...

A: Click to see the answer

Q: 52. There are 40 students in a summer cohort. Of those students, 20 are taking an accounting course,...

A: Click to see the answer

Q: Suppose the United States and Mexico both produce hamburgers and tacos. The combinations of the two ...

A: The country which produces more Taco has absolute advantage in Taco. So, United States has absolute ...

Q: Which best explains why the Supreme Court’s decision in Regents v. Bakke angered people on both side...

A: The statement that best describes the Supreme Court’s decision in Regents v. Bakke angered people on...

Q: A car dealership wants to try out a new leasing arrangement, which will allow a buyer to trade a car...

A: Click to see the answer

Q: Twenty-three percent of U.S. employees who are late for work blame oversleeping. You randomly select...

A: Hey there! Thank you for posting the question. Since your question has more than 3 parts, we are sol...

Q: bat (flying) dolphin (swimming)

A: Anatomical features like bone anatomy are studied to find the evolutionary relationship between two ...

Q: Q6.5. Which statement below is TRUE? O Crossing over shuffles genes between non-homologous chromosom...

A: Few statements are given, have to mark the true statement.

Q: In one or two sentences, describe a scenario using the combined gas law in which changes occur in th...

A: Ideal gas law is  PV = nRT where P= pressure of gas. V= volume of gas. n= number of moles of gas. R=...

Q: 1. This question relates to the the1H-NMR spectrum of an alkane and two alkenes. a. How many proton ...

A: 1H-NMR spectrum is used to detect number of proton environments and multiplicity (surrounding enviro...

Q: Which of the following exemplifies the empirical method? Group of answer choices A student writes a...

A: Empirical research is based on perceived and restrained aspects and acquires information from real e...

Q: Find the area of the shaded figure, rounded to two decimals. (Assume w = 7, x = 8, y = 9, and z = 10...

A: Click to see the answer