Assume a firm's production is as follows: Q= L^0.5K A. Does this firm exhibit diminsishing...

Assume a firm's production is as follows:

Q= L^0.5K

A. Does this firm exhibit diminsishing returns with respect to labor?

B. Does this firm exhibit dimishing returns with respect to capital?

C. In the long run, does this firm exhibit increasing, constant, or decreasing returns to scale?

D. Construct a short run cost function for this firm, assuming capital is fixed.

E. Identify the TVC and TFC in the short run cost function

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

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