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In: Economics

There is a firm who manufacturers and uses capital (K) and labor (L) to product output...

There is a firm who manufacturers and uses capital (K) and labor (L) to product output Q such that Q=10KL. The unit price for K and L are w = $15 and r = $5, respectively.

1).Does the firm’s production exhibit decreasing, constant, or increasing returns to scale?

2)What is the optimal input bundle (K*, L*) to produce 480 unit of output?

3)Derive the long run cost function.

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