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I. Assume a firm has production technology given by f(L,K) = L^1/3 K^1/3. Assume pK = 1 = pL and compute the firm’s short-run and long-run cost functions.
II. Assume a firm has production technology given by
f(L,K) = (max(L,K))^1/3 · (min(L,2K))^1/3
Assume pK = 2, pL = 1 and compute the firm’s long-run cost function.
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