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Subject:EconomicsPrice: Bought3
1. Assume that in the short run, the amount of capital is fixed at 15 units. Find the short-run total cost (TC) equation. Explain and show your work.
2. With the production function above, we can show that in the long run the lowest TC is obtained using the input choices L = Q/3 and K = 3Q. Find the long-run TC equation. Explain and show your work.
A firm produces according to Q = VKL, with MP, = VK 21C and MPK = VT 2/K Input prices are w=$90 and r=$10 per day.
