Let the production function be Q = 4∗K1/4L1/4 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) FindtheamountofKandLnecessarytoproduceQ=8whenv=16andw=1 (with minimal possible cost). (d) Find the average and marginal cost functions.

Let the production function be Q = 4∗K1/4L1/4 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) FindtheamountofKandLnecessarytoproduceQ=8whenv=16andw=1 (with minimal possible cost). (d) Find the average and marginal cost functions.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter9: Production Functions

Section: Chapter Questions

Problem 9.7P

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