A firm operates using the production technology

Question # 00542204 Posted By: dr.tony Updated on: 06/08/2017 02:12 AM Due on: 06/08/2017
Subject Economics Topic Microeconomics Tutorials:
Question
Dot Image

5. A firm operates using the production technology f(L,K) = ?(LK). The wage rate is w = 1, the rental rate of capital is r = 3, and the price of the output is p = 10.

5(a). (23 points) Show that the firm’s short-run demand for labor as a function of the fixed level of capital K > 0 satisfies

L(K) = 25K.

(b). (20 points) What is the effect of a marginal change in K on the profit of the firm?

Dot Image
Tutorials for this Question
  1. Tutorial # 00539353 Posted By: dr.tony Posted on: 06/08/2017 02:13 AM
    Puchased By: 2
    Tutorial Preview
    The solution of A firm operates using the production technology...
    Attachments
    A_firm_operates_using_the_production_technology.ZIP (18.96 KB)

Great! We have found the solution of this question!

Whatsapp Lisa