Suppose a firm has a production function given by Q = L1/2K1/2. The firm can purchase labor, L,...
Question:
Suppose a firm has a production function given by Q = L{eq}^{1/2} \cdot {/eq}K{eq}^{1/2} {/eq}. The firm can purchase labor, L, at a price w = 8, and capital, K, at a price of r = 2.
a) What is the firm's total cost function, TC(Q)?
b) What is the firm's marginal cost of production?
Marginal Cost:
A firm's marginal cost of production is the additional cost of producing and selling and additional unit of output and is equal to the change in total cost divided by the change in the quantity, which is also equal to the slope of the total cost equation.
Answer and Explanation: 1
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View this answera) What is the firm's total cost function, TC(Q)? {eq}TC = \frac{8}{K}q^2 + 2K {/eq}
b) What is the firm's marginal cost of production? {eq}MC =...
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