Suppose a firm has production function F(L, K) = L6K.6. Following the steps in the slides, derive this firm's long run cost function C(q) when w = 15 and r = 8. Also derive the firm's long run marginal cost C'(Q). Why is the firm's long run marginal cost decreasing?
Suppose a firm has production function F(L, K) = L6K.6. Following the steps in the slides, derive this firm's long run cost function C(q) when w = 15 and r = 8. Also derive the firm's long run marginal cost C'(Q). Why is the firm's long run marginal cost decreasing?
Chapter10: Cost Functions
Section: Chapter Questions
Problem 10.3P
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