3. Suppose a firm has the following production function q = LK4. Let the unit price of capital be 1 and the unit price of labour be w. a) Use the Lagrangian method to find the optimal number of each...

3. Suppose a firm has the following production function q = LK4. Let the unit price<br>of capital be 1 and the unit price of labour be w.<br>a) Use the Lagrangian method to find the optimal number of each input used to<br>produce an order of q'units<br>b) Find the long-run cost function.<br>c) How does the cost function change if the wage rate changes?<br>

Extracted text: 3. Suppose a firm has the following production function q = LK4. Let the unit price of capital be 1 and the unit price of labour be w. a) Use the Lagrangian method to find the optimal number of each input used to produce an order of q'units b) Find the long-run cost function. c) How does the cost function change if the wage rate changes?

Jun 11, 2022

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3. Suppose a firm has the following production function q = LK4. Let the unit price of capital be 1 and the unit price of labour be w. a) Use the Lagrangian method to find the optimal number of each...

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