) Suppose we have the following production function: Q=K2/312/3. Does the technology have onstant returns to scale (CRS)? If not, what? Show your work and explain what it means. ) What is the firm's cost minimi on problem in the long-run? Explain and illustrate in a figure sing isocost and isoquants how termine optimal inputs K and L. ← ) Now, consider the short-run where K is fixed at 8 (so that K²/3 = 4). Let r = $20 and w = $10. Show en discuss how short-run average costs change as O rises. You can use math or a table/figure to do
) Suppose we have the following production function: Q=K2/312/3. Does the technology have onstant returns to scale (CRS)? If not, what? Show your work and explain what it means. ) What is the firm's cost minimi on problem in the long-run? Explain and illustrate in a figure sing isocost and isoquants how termine optimal inputs K and L. ← ) Now, consider the short-run where K is fixed at 8 (so that K²/3 = 4). Let r = $20 and w = $10. Show en discuss how short-run average costs change as O rises. You can use math or a table/figure to do
Chapter9: Production Functions
Section: Chapter Questions
Problem 9.1P
Related questions
Question
Solve parts d and e please
![(a) Suppose we have the following production function: Q=K²/³L2/³ Does the technology have
constant returns to scale (CRS)? If not, what? Show your work and explain what it means.<
(b) What is the firm's cost minimi on problem in the long-run? Explain and illustrate in a figure
using isocost and isoquants how termine optimal inputs K and L. ←
(c) Now, consider the short-run where K is fixed at 8 (so that K²/³ = 4). Let r = $20 and w = $10. Show
then discuss how short-run average costs change as Qrises. You can use math or a table/figure to do
this.
(d) Suppose P = $15. Show that optimal Q = 64 in the short-run. You can use math or a spreadsheet.
Show details. <
(e) Now suppose P = $5. Should the firm shut-down and set Q=0? Explain. <](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Faf4d5614-e5fa-4399-aabc-c345eeef0588%2F5eb3e96c-11c4-4cc4-82f1-686c0e0e1190%2Fa1twqj_processed.png&w=3840&q=75)
Transcribed Image Text:(a) Suppose we have the following production function: Q=K²/³L2/³ Does the technology have
constant returns to scale (CRS)? If not, what? Show your work and explain what it means.<
(b) What is the firm's cost minimi on problem in the long-run? Explain and illustrate in a figure
using isocost and isoquants how termine optimal inputs K and L. ←
(c) Now, consider the short-run where K is fixed at 8 (so that K²/³ = 4). Let r = $20 and w = $10. Show
then discuss how short-run average costs change as Qrises. You can use math or a table/figure to do
this.
(d) Suppose P = $15. Show that optimal Q = 64 in the short-run. You can use math or a spreadsheet.
Show details. <
(e) Now suppose P = $5. Should the firm shut-down and set Q=0? Explain. <
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