What is the firm marginal cost

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Reference no: EM131090339

Suppose a firm’s production function is given by Q = L1/2*K1/2. The Marginal Product of Labor and the Marginal Product of Capital are given by: MPL =(K^1/2)/(2L^1/2) , and MPK =(L^1/2)/(2K^1/2) . a) Suppose the price of labor is w = 25, and the price of capital is r = 4. Derive the firm’s total cost function. b) What is the firm’s marginal cost? c) For this problem, you will sketch the graph of the firm’s isoquant for Q = 10 units of output, and on the same graph sketch the firm’s isocost line associated with the total cost of producing Q = 10 units of output. For the isoquant, clearly identify 4 combinations of Labor and Capital that will produce Q = 10 (including the bundle that minimizes the firm’s cost of production).

Reference no: EM131090339

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