Question

A firm produces good Q using inputs L & K. The firm’s production function is X...

A firm produces good Q using inputs L & K. The firm’s production function is X = 20L^0.5 + 11K. The
price of K is $P_K a unit and the price of L is $P_L a unit, and in the short‐run, the capital input is
fixed at 3 units.
a. If the firm needs an output of X_1 in the short‐run, what is the firm’s total cost and marginal
cost of production?
b. What is the firm’s fixed cost and variable cost?

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A firm produces good X and has a production function X = 2L^0.25K^0.25, where L and...
A firm produces good X and has a production function X = 2L^0.25K^0.25, where L and K are the inputs. Assume that the price of L is $6 and the price of capital is $12. Let the firm have a target output of X1 units. a. Find the firm’s conditional demand for labor and capital. b. Find the firm’s total cost function. c. What is the firm’s marginal cost?
A firm’s production function is Q(L,K) = K^1/2 + L. The firm faces a price of...
A firm’s production function is Q(L,K) = K^1/2 + L. The firm faces a price of labor, w, and a price of capital services, r. a. Derive the long-run input demand functions for L and K, assuming an interior solution. If the firm must produce 100 units of output, what must be true of the relative price of labor in terms of capital (i.e. w/r) in order for the firm to use a positive amount of labor? Graphically depict this...
A firm uses two inputs, capital K and labor L, to produce output Q that can...
A firm uses two inputs, capital K and labor L, to produce output Q that can be sold at a price of $10. The production function is given by Q = F(K, L) = K1/2L1/2 In the short run, capital is fixed at 4 units and the wage rate is $5, 1. What type of production function is F(K, L) = K1/2L1/2 ? 2. Determine the marginal product of labor MPL as a function of labor L. 3. Determine the...
A firm has the following production function: q=5LK^0.5+2L^2K-L^3K What is its short-run production function if capital...
A firm has the following production function: q=5LK^0.5+2L^2K-L^3K What is its short-run production function if capital is fixed at K=9? What are the firm’s marginal product of labour and average product of labour in the short run? Show that the firm’s elasticity of output with respect to labour in the short run is a function of marginal product of labour and average product of labour. Calculate the short-run elasticity of output with respect to labour
A firm produces output according to the production function. Q=sqrt(L*K) The associated marginal products are MPL...
A firm produces output according to the production function. Q=sqrt(L*K) The associated marginal products are MPL = .5*sqrt(K/L) and MPK = .5*sqrt(L/K) (a) Does this production function have increasing, decreasing, or constant marginal returns to labor? (b) Does this production function have increasing, decreasing or constant returns to scale? (c) Find the firm's short-run total cost function when K=16. The price of labor is w and the price of capital is r. (d) Find the firm's long-run total cost function...
14. A firm’s production function is Q = 12*L0.5*K0.5. Input prices are $36 per labor unit...
14. A firm’s production function is Q = 12*L0.5*K0.5. Input prices are $36 per labor unit and $16 per capital unit. The product’s price is P = $10. (Given: MP(L) = 6*L-0.5*K0.5; and MP(K) = 6*L0.5*K-0.5) In the short run, the firm has a fixed amount of capital, K = 9. Calculate the firm’s profit-maximizing employment of labor. (Note: short term profit maximization condition: MPR(L) = MC(L) ) In the long run, suppose the firm could adjust both labor and...
a firm produces a product with labor and capital as inputs. The production function is described...
a firm produces a product with labor and capital as inputs. The production function is described by Q=LK. the marginal products associated with this production function are MPL=K and MPK=L. let w=1 and r=1 be the prices of labor and capital, respectively a) find the equation for the firms long-run total cost curve curve as a function of quantity Q b) solve the firms short-run cost-minimization problem when capital is fixed at a quantity of 5 units (ie.,K=5). derive the...
Consider a firm using the production technology given by q = f(K, L) = ln(L^K) If...
Consider a firm using the production technology given by q = f(K, L) = ln(L^K) If capital is fixed at K = 2 units in the short run, then what is the profit maximizing allocation of output if the price of output and respective input prices of labor and capital are given by (p, w, r) = (2, 1, 5)?
Suppose a firm’s production function is given by Q = L 1/2 , K 1/2. a)...
Suppose a firm’s production function is given by Q = L 1/2 , K 1/2. a)   Suppose the firm has a fixed cost FC=6, the price of labor is w = 64 and the price of capital is r = 4. Derive the firm’s total cost function, TC(Q). b)   What is the firm’s marginal cost? c)   Graph the firm’s isoquant for Q = 20 units of output. On the same graph, sketch the firm’s isocost line associated with the total...
A firm produces output (y), using capital (K) and labor (L). The per-unit price of capital...
A firm produces output (y), using capital (K) and labor (L). The per-unit price of capital is r, and the per-unit price of labor is w. The firm’s production function is given by, y=Af(L,K), where A > 0 is a parameter reflecting the firm’s efficiency. (a) Let p denote the price of output. In the short run, the level of capital is fixed at K. Assume that the marginal product of labor is diminishing. Using comparative statics analysis, show that...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT