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Unformatted text preview: Cost Minimization: Example 1 s q = L 1/2 K 1/2 , w = 4, r = 2 Cost Minimization: Example 2 s q = L + K, w = 4, r = 2 Cost Minimization: Example 3 s q = min{L,K}, w = 4, r = 2 Substitutability Firms Problem Min L,K wL + rK subject to q = f(L,K) Langrangian Approach Firms Problem Min L,K wL + rK subject to q = f(L,K) Langrangian Approach Firms Problem Min L,K wL + rK subject to q = f(L,K) Alternative Approach Min K wL(q,K) + rK FOC:...
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 Spring '08
 hnewhous
 Economics

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