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as4 - strictly concave and strictly convex 2 Elasticities...

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ECON 331 Written Assignment 4 due in class Oct. 14 1. Suppose a firm has a total cost function given by C y ay 1/2 by 3/2 where a and b are positive constants. Draw a sketch of the AC and MC curves (in the same figure) for this firm. Your sketch should show where the minimum points are on each of these curves. These points can be found by putting the derivative equal to 0 or in the case of AC putting AC MC . Show in your sketch where these curves are
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Unformatted text preview: strictly concave and strictly convex. 2. Elasticities can be defined for any real valued function y f x according to the formula yx x y f x This is called the elasticity of y or f with respect to x . Let z Af x f x / x . Find a simple formula for calculating zx from yx ....
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