Show where or not above production function exhibits, Ask an Expert

Economics

Q. 2. (i) Production function for a firm is given by

Q = L+K+LK

where Q denotes output; Land K labour and capital inputs.
Wage rate and rental rate are given by w and r respectively.

(a) Show where or not above production function exhibits diminishing marginal productivity of labour.

(b) Determine nature of Return to Scale as exhibited by above production function

(c) Using Lagrangean Multiplier method, calculate least cost combinations of labour and capital and resulting long run total cost function for above production function. Explain economic significance of Lagrangean Multiplier and calculate its value.

(d) Using above cost function, calculate numerical value of long run total cost when Q =224, w = 16 and r = 144.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9294900

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