consider the production function Q=L^(1/2);- find the labor input to need to produce q units.;- suppose a unit of labor costs $100. How much does it costs to produce q units? (this is a short run cost function);- Compute the MC and AC with cost function in above. Draw them with the cost function in the quantity-cost space.;- suppose the wage w depends on how many units of labor are hired. The labor supply function is give by L=300-W. The inverse labor supply function is w=300-L. How much does it cost to product q units?;- Compute the MC and AC with cost function in above.;- solve for the quantity where the MC equals to AC.;- draw the MC and AC and TC using the results in last two questions. Note that the total cost has a quartic form.
Paper#26304 | Written in 18-Jul-2015Price : $22