Let the production function be Q = 4* K1/4 L1/4 assume that both factors are variable. (a) Derive the contingent demand functions for K and L (b) Substitute the contingent demand functions in the total cost that you minimized in part a) to obtain the total cost function. (c) Find the amount of K and L necessary to produce Q=8 when v=16 and w=1 (with minimal possible cost). (d) Find the average and marginal cost functions.

Let the production function be Q = 4* K1/4 L1/4 assume that both factors are variable. (a) Derive the contingent demand functions for K and L (b) Substitute the contingent demand functions in the total cost that you minimized in part a) to obtain the total cost function. (c) Find the amount of K and L necessary to produce Q=8 when v=16 and w=1 (with minimal possible cost). (d) Find the average and marginal cost functions.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter9: Applications Of Cost Theory

Section: Chapter Questions

Problem 1.6CE

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