The expansion path of a firm gives five different quantities of output such as 10,20,30,40 and 50 units; and the price of labor is $25 and the price of capital is $100 per unit. The table shows the long-run costs of the firm at given quantities of output. QLKLTC( $)LAC( $)LMC ($)106420360036036020120407000350340302005810800360380402888015200380440504409020000400480 a. With the help of graph, analyze the properties of LAC and LMCb. Interpret and evaluate the numerical and graphical data and illustrate the relationship between LAC and LMC

Price of labor = $25 Price of per unit capital = $100 Long-run costs of the firm at given…

Answered: The expansion path of a firm gives five…

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter13: Factor Markets: With Emphasis On The Labor Market

Section13.1: Factor Market

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The expansion path of a firm gives five different quantities of output such as 10,20,30,40 and 50 units; and the price of labor is $25 and the price of capital is $100 per unit. The table shows the long-run costs of the firm at given quantities of output.

Q	L	K	LTC( $)	LAC( $)	LMC ($)
10	64	20	3600	360	360
20	120	40	7000	350	340
30	200	58	10800	360	380
40	288	80	15200	380	440
50	440	90	20000	400	480

a. With the help of graph, analyze the properties of LAC and LMC

b. Interpret and evaluate the numerical and graphical data and illustrate the relationship between LAC and LMC

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