can you show me steps to solve this 1. Assume a firm has the following production function:q(L, K) = L²/2.K/2Additionally, assume that, in the short-run, the firm has already invested in 1 unit of capital (K = 1) and paid a costof $1 to do so (F = 1). Finally, assume that the firm must pay a wage of $1 (w = 1) for each unit of labor (L) theyhire.A) Solve for the firm's short-run supply function (q* (p)) that specifies the firm's profit maximizing level of output forany price (p).

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q(L, K) = L²/2 . K²/2 dditionally, assume that, in the short-run, the firm has already invested in 1 unit of capital (K = 1) and paid i $1 to do so (F = 1). Finally, assume that the firm must pay a wage of $1 (w = 1) for each unit of labor (L) re.

q(L, K) = L²/2 . K²/2 dditionally, assume that, in the short-run, the firm has already invested in 1 unit of capital (K = 1) and paid i $1 to do so (F = 1). Finally, assume that the firm must pay a wage of $1 (w = 1) for each unit of labor (L) re.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter9: Production Functions

Section: Chapter Questions

Problem 9.9P

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Equilibrium Price and Quantity

Equilibrium refers to a state of balance that comes about because there is equality in all forces.

Question

can you show me steps to solve this

1. Assume a firm has the following production function:
q(L, K) = L²/2.K/2
Additionally, assume that, in the short-run, the firm has already invested in 1 unit of capital (K = 1) and paid a cost
of $1 to do so (F = 1). Finally, assume that the firm must pay a wage of $1 (w = 1) for each unit of labor (L) they
hire.
A) Solve for the firm's short-run supply function (q* (p)) that specifies the firm's profit maximizing level of output for
any price (p).

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