Suppose that the market for apples is perfectly competitive. Production of apples requires two inputs: workers (L) and land (K). The production function for apples is: F(K,L)=3K^(1/3)* L^(2/3) A) Suppose that W=4, R=16, and in the short-run, K=27. Find the firm’s short-run cost function SRC(q) and short-run marginal cost function SRMC(q). B) What is the optimal production of apples if P=4? What are consumer surplus and profit? C) Find the firm’s short-run supply of apples Q(P) when W=4, R=16 and K=27.
Suppose that the market for apples is
workers (L) and land (K). The production function for apples is:
F(K,L)=3K^(1/3)* L^(2/3)
A) Suppose that W=4, R=16, and in the short-run, K=27. Find the firm’s short-run cost function SRC(q)
and short-run marginal cost function SRMC(q).
B) What is the optimal production of apples if P=4? What are
C) Find the firm’s short-run supply of apples Q(P) when W=4, R=16 and K=27.
D) Find the firm’s long-run cost function LRC(q) and long-run marginal cost function LRMC(q) when W=4
and R=16. How do these compare to the firm’s short-run cost function and marginal cost function?
E) Find the firm’s long-run supply of apples q(P) when W=4 and R=16.
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