1. Sketching curves. Suppose that the production technology for our class restaurant changes (as depicted below). Our technology is such that we need to hire a minimum amount of labor LMIN before we can produce any meals. Moreover, suppose we are in the short run and our capital is fixed (K = K) and that the rental price of capital is r>0. Using the short run production function, illustrated below, sketch: (a) The marginal and average product curves. (b) The short run cost curve (label this curve TCK-K). (c) The marginal and average cost curves. Production Function $ q/L 0 LMIN TPK 0 $/91 I q

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1. Sketching curves. Suppose that the production technology for our class restaurant
changes (as depicted below). Our technology is such that we need to hire a minimum amount
of labor LMIN before we can produce any meals. Moreover, suppose we are in the short run
and our capital is fixed (K = K) and that the rental price of capital is r>0. Using the short
run production function, illustrated below, sketch:
(a) The marginal and average product curves.
(b) The short run cost curve (label this curve TCK-K).
(c) The marginal and average cost curves.
Production Function
$
q/L
0
LMIN
TPK
0
$/91
I
q
Transcribed Image Text:1. Sketching curves. Suppose that the production technology for our class restaurant changes (as depicted below). Our technology is such that we need to hire a minimum amount of labor LMIN before we can produce any meals. Moreover, suppose we are in the short run and our capital is fixed (K = K) and that the rental price of capital is r>0. Using the short run production function, illustrated below, sketch: (a) The marginal and average product curves. (b) The short run cost curve (label this curve TCK-K). (c) The marginal and average cost curves. Production Function $ q/L 0 LMIN TPK 0 $/91 I q
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