Suppose that the production of sports cars is given by the following production function: Q - (L/2+ K2) Suppose that the price of labor is $10 per unit and the price of capital is $1 per unit. a. Find the optimal labor and capital combination as a function of output Q. b. Derive the firm's long-run total cost function. C. Derive the firm's long-run average total cost function.

Suppose that the production of sports cars is given by the following production function: Q - (L/2+ K2) Suppose that the price of labor is $10 per unit and the price of capital is $1 per unit. a. Find the optimal labor and capital combination as a function of output Q. b. Derive the firm's long-run total cost function. C. Derive the firm's long-run average total cost function.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter10: Cost Functions

Section: Chapter Questions

Problem 10.3P

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