Question 2 Consider the same soda can manufacturer, with the same production function as in the previous question. (a) At the wage of t= 15 and the rent of r= 150, write down an equation relating relating K and L that comes from the tangency condition. (b) Suppose that the firm has to make 100 soda cans. Write down an equation relating K and L that comes from the production function. (e) Based on your previous work, solve for the cost-minimizing combination K and L. (d) If C(Q) is the cost function for the firm, what is C(100)? [This is the long-run cost, since we are assuming that firms can freely optimize all quantities of inputs

Question 2 Consider the same soda can manufacturer, with the same production function as in the previous question. (a) At the wage of t= 15 and the rent of r= 150, write down an equation relating relating K and L that comes from the tangency condition. (b) Suppose that the firm has to make 100 soda cans. Write down an equation relating K and L that comes from the production function. (e) Based on your previous work, solve for the cost-minimizing combination K and L. (d) If C(Q) is the cost function for the firm, what is C(100)? [This is the long-run cost, since we are assuming that firms can freely optimize all quantities of inputs

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter9: Production Functions

Section: Chapter Questions

Problem 9.7P

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