Find out contingent demand function for labor and capital

Assignment Help Business Economics

Reference no: EM1359157

The production function for doors is given by: Q=(K^(a))(L^(1-a)). The wage is equal to 1 and the price of capital is equal to 5. Consider first the short-run decisions of the firm Microhard (simply fix the level of capital at K).

a) Write down the cost minimization problem that Microhard has to solve in the short run.

b) Find the contingent demand function for labor and the corresponding short-run total cost function.

c) Find the short run-average cost and the short-run marginal cost of labor. Now consider long-run decisions, where we are free to choose the optimal amount of labor and capital.

d) Write down the cost minimization problem that Microhard has to solve in the long run.

e) Find out the contingent demand function for labor and capital and the corresponding total cost function.

f) Find the long-run average cost and the long-run marginal cost of both inputs.

Reference no: EM1359157

Questions Cloud

What is the tension in the cord in the original situation : What is the tension in the cord in the original situation. A cube of ice is taken from the freezer at -9.3°C and placed in a 95 g aluminum calorimeter filled with 297 g of water at room temperature of 20°C. The final situation is observed to be all..

Type of sexual abuse : How would you define sexual abuse/assault? Identify and describe one type of sexual abuse.

Visual presentation of a work report : How would you present the information related to this report in a visual manner

Count back from the secondary after last frame : If the poll bit is on in the sixth frame, what will be the N(R) count back from the secondary after the last frame? Assume error-free operation.

Find out contingent demand function for labor and capital : Find out the contingent demand function for labor and capital and the corresponding total cost function. Find the long-run average cost and the long-run marginal cost of both inputs.

Treasury responsibilities : What is meant by this term and how should the CFO be involved in this area? Also, how does "risk management" relate to treasury responsibilities?

Calculation of market value and book value : Klingon Cruisers, Inc., purchased new cloaking machinery three years ago for $9.5 million. The machinery can be sold to the Romulans today for $6.5 million. Klingon's current balance sheet shows net fixed assets of $5.2 million, current liabili..

What is the average induced emf : What is the average induced EMF. what is the magnitude of the velocity of raindrops relative to the car.

Pedophiles and non-pedophiles : It has been suggested that there are differences in brain function between pedophiles and non-pedophiles.

User Account

All Pages