3. In order to produce 28 widgets, a firm must use 14 workers in combination with...

3. In order to produce 28 widgets, a firm must use 14 workers in combination with 4 machines.

a. Let q denote the number of widgets, L denote the number of workers, and K denote the number of machines. Write down the production function that represents this technology for producing widgets. In a diagram with L on the horizontal axis and K on the vertical axis, draw the isoquant associated with q = 56.

b. Let w represent the wage rate and r represent the rental rate of capital. Solve for the firm’s factor demand functions for L and K.

c. Solve for the firm’s long run cost function. (2 points).

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Expert Solution

Rahul Sunny answered 1 year ago

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