A firm has the production function y = 4LK. The marginal products are given by MP, = 4K and MPK = 4L. (a) Provide an expression for the long run total cost function. (b) Now suppose that w =r = 25. Write out the expression for the long run total cost curve, and plot it on a graph. 1 (c) With w =r = 25, derive the long run average cost curve, and plot it on a graph. Does this firm experience increasing or decreasing average cost, as the output increases?

The production function for a product is given by q= 10K^(1/2)L^(1/2) where K is capital, and L is labor and q is output d)  Now suppose w =30 and r = 120. What is the minimum cost of producing q=1000. (You must show your work by clearly writing the equations that you use to derive the cost minimizing levels of L and K.) e)  Now suppose that the firm is in the short run and cannot vary the amount of capital. That is, it must use the same amount of capital as in part d). However, the firm wants to produce 1200 units of output. How much labor should it use to minimize its cost and what is the minimum cost of producing q =1200?

No hand written solution and no image

30. The production function is f(L, M) = 4L1/2 M¹2, where L is the number of units of labor and M is the number of machines used. If the cost of labor is $49 per unit and the cost of machines is $16 per unit, then what is the total cost of producing 5 units of output?