Answered: Consider the following cost…

Consider the following cost minimization problem: Minimization CT = wL + rK Hold it: q= L1/2 K1/2 a) Obtain the long-run cost function b) If K = 9 and w = 1, obtain the long-run cost function

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Consider the following cost minimization problem:

Minimization CT = wL + rK

Hold it: q= L^1/2 K^1/2

a) Obtain the long-run cost function
b) If K = 9 and w = 1, obtain the long-run cost function

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