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w=10, r=25. The price of output is constant at $50. The production function is f(L,K) = L^.5K^.5.
If the current capital stock is fixed at 1600 units, what is L* in the short run? How much profit will the firmearn?
2. when Q = 10(LK)^0.5, w = 80, r = 20. what is (L*,K*) to produce 800 units?
Why does a prospective monopolistic competitor find it relatively easy to start production in the long run?
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