The production function has two input, labor (L) and capital (K). The price for L and...

The production function has two input, labor (L) and capital (K). The price for L and K are respectively W and V.

q = L + K a linear production function

q = min{aK, bL} which is a Leontief production function

1.Calculate the marginal rate of substitution.

2.Calculate the elasticity of the marginal rate of substitution.

3.Drive the long run cost function that is a function of input prices and quantity produced.

Expert Solution

Rahul Sunny answered 2 years ago

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