Calculate the optimality condition

Reference no: EM133641217

A Farmer-Producer from the South produces vegetables for export.

His firm has the production function Q=6T^(1/3) * L^(2/3) where L represents the number of workers and T the cultivated area in hectares.

We know that PL is the price of labor, PT the price of land and CT the cost of production of this firm.

We will assume that PL =12$ PT =6$ and CT=900$.

Question 1) Give the equation for the isocost of the firm?

Question 2) This company wishes to obtain optimal quantities of Let de T. What are the properties of the optimal combination? (Please note: we are not asking you here to calculate the optimal combination, but only to cite its properties from a theoretical point of view).

Question 3) Calculate the optimality condition?

Question 4) What is the total cost function, marginal cost function and cost function average of this firm when we are in a short period and the land factor is fixed: T = 4?

Question 5) Suppose we are now in a long period. has. Explain what this notion of long period means?

b. What quantities of factors will be used optimally for this producer? vs. What will then be its level of production?

Question 6) If this producer wishes to triple his production, by how much must he increase his production factors? Is this a question of returns to scale or returns to factors? Explain.

Reference no: EM133641217

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