Question

Consider a firm with the production function f(L,K)=L1/2K2 Suppose the firm is in the short run...

Consider a firm with the production function f(L,K)=L1/2K2 Suppose the firm is in the short run and has a level of capital K = 1. If the cost of labor is w=2 and the cost of capital is r=2, derive the a) TVC, b) TFC, c) TC, d) MC, e) ATC, f) AVC, ) AFC. Draw these curves in a relevant set of well-labelled diagrams. Repeat the exercise if the firm was in the short run with a capital level of K=4

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #2

answered by: anonymous
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
2. A firm combines labor (L) and capital (K) to produce output (Q). The price of...
2. A firm combines labor (L) and capital (K) to produce output (Q). The price of one unit of labor is 50 and the price of one unit of capital is 20. This firm is producing in the short run (remember that in the short run there is one fixed resource, in this case, capital). Complete the following information for this firm L K Q TVC TFC TC ATC AVC AFC MC 0 20 0 - 1 18 2 60...
Consider the following total cost function for Firm A: TC(Q)=4Q3-12Q2+2Q+1,000,000. Calculate TVC, AVC, TFC, AFC, AC....
Consider the following total cost function for Firm A: TC(Q)=4Q3-12Q2+2Q+1,000,000. Calculate TVC, AVC, TFC, AFC, AC. Does this cost function satisfy the law of diminishing returns? Hint: MC(Q)= 12Q2-24Q+2 Consider the following Long-run average cost function for Firm A: TC(Q)= 12Q+4 (Q represents the scale of operation). Does this firm benefit from scaling down? Explain your answer.
Show working 21) The relationship Q = f(K, L) is an example of a A) cost...
Show working 21) The relationship Q = f(K, L) is an example of a A) cost function. B) production function. C) demand equation. D) profit equation. 28) After some point successive equal increases in a variable factor of production, when added to a fixed amount of inputs, will result in smaller increases in output. This is known as A) the long run. B) the law of diminishing marginal product. C) marginal physical product. D) short run average cost. 33) Suppose...
A perfectly competitive firm has the following total cost and marginal cost functions:      TC =...
A perfectly competitive firm has the following total cost and marginal cost functions:      TC = 100 + 10q – q2 + (1/3)q3      MC = q2 – 2q +10      a)    For quantities from 0 to 10 determine: TC, TFC, TVC, and MC. b)    For quantities from 0 to 10 determine: ATC, AFC, and AVC. c)    Assume P (MR) equals 45. For quantities from 0 to 10 determine: TR and profit. d)    At what quantity is profit maximized?...
Complete the table below, which represents the production costs for a typical firm. TP is total...
Complete the table below, which represents the production costs for a typical firm. TP is total product (which is also Q). Please note that for the first row (where TP = 0), you cannot calculate the AFC, the AVC, the ATC and the MC, since there are 0 units being produced. However, you are expected to calculate the TC for the first row (where TP =0) and you are also expected to fill in all the other missing numbers in...
1.        Is the basic difference between the short run and the long run that the...
1.        Is the basic difference between the short run and the long run that the law of diminishing returns applies in the long run, but not in the short run? 2.        Draw a typical production function and explain its shape. Below that diagram, draw an average product schedule and marginal product schedule. Indicate the relationship between the two diagrams. ##3         Explain why the marginal product of labour initially increases as more workers are hired and then eventually...
For this activity, you must apply formulas for total variable cost, average variable cost, average total...
For this activity, you must apply formulas for total variable cost, average variable cost, average total cost, and marginal cost, and use these computations to determine maximum profit A firm’s cost curves are given in the following table: Q TC TFC TVC AVC ATC MC 0 100 100 1 155 100 2 195 100 3 215 100 4 245 100 5 300 100 6 360 100 7 435 100 8 515 100 9 605 100 a) Complete the table. b)...
16) In the short-run cost analysis, when a firm’s marginal cost (MC) is unavailable, the best...
16) In the short-run cost analysis, when a firm’s marginal cost (MC) is unavailable, the best alternative of MC is its a) average total cost (ATC) b) average fixed cost (AFC) c) total variable cost (TVC) d) average variable cost (AVC) 19) Which of the following is NOT a market characteristic for monopoly? a) One firm is the only supplier of a product. b) Entry into the market is blocked. c) The firm can influence market price though output decision-making....
Suppose that a firm has production function F(L, K) = L1/4 K3/4 for producing widgets, the...
Suppose that a firm has production function F(L, K) = L1/4 K3/4 for producing widgets, the wage rate for labor is w = $32, and the rental rate of capital is r = $6. Suppose the firm has an order to produce 40 units of output. a) Carefully write out the firm’s cost minimization problem, using information specific to this problem. b) Express two equations—specific to this problem—that the optimal solution satisfies. c) Solve these two equations for L* and...
Consider the following table of numbers, which represents demand and cost conditions for a perfectly competitive...
Consider the following table of numbers, which represents demand and cost conditions for a perfectly competitive firm. The market price is 600$ (a) Fill in the missing values. (b) What level of output should the firm produce? Explain. (c) What do you expect to happen in this industry in the long run? Explain. Q TFC AFC TVC AVC TC ATC MC TR MR Profit 0 xxxx 0 xxxx 570 xxxx xxxx xxxx 1 570 240 2 430 3 670 4...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT