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Unformatted text preview: 5. How does cost change with output, and what is true about the returns to scale in the above production function? 6. Suppose now that k is fixed at some level k in the short run. Find the short run cost function associated with the above production function. There should be some fixed costs in your production functionwhere do these come from? 7. On the same graph, plot the short run cost function and the long run cost function. At what point do these functions cross or intersect? Hint: dont be afraid to look at Figure 8.8 and surrounding material for guidance. Repeat problems 6-9 for the production function ) ( 2 1 2 1 l k A q + = ....
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This note was uploaded on 11/12/2009 for the course ECONOMICS 701 taught by Professor Baker during the Spring '09 term at CUNY Hunter.
- Spring '09