Let the production function be Q = 4∗K1/4L1/4 assume that both factors are variable.(a) Derive the contingent demand functions for K and L(b) Substitute the contingent demand functions in the total cost that you minimized in part a) to obtain the total cost function.(c) FindtheamountofKandLnecessarytoproduceQ=8whenv=16andw=1 (with minimal possible cost).(d) Find the average and marginal cost functions.

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Answered: Let the production function be Q =…

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter7: Proudction Costs

Section: Chapter Questions

Problem 17SQ

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Let the production function be Q = 4∗K1/4L1/4 assume that both factors are variable.

(a) Derive the contingent demand functions for K and L
(b) Substitute the contingent demand functions in the total cost that you minimized in part a) to obtain the total cost function.
(c) FindtheamountofKandLnecessarytoproduceQ=8whenv=16andw=1 (with minimal possible cost).
(d) Find the average and marginal cost functions.

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