A company produces according to the production function = + , where K...
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Accounting
A company produces according to the production function = + , where K is capital and L is labor. The cost per unit of capital is r and the wage cost per unit of labor is w. The price of Q is p.
1. Find K* and L* that minimize the company's costs in terms of output Q and write as functions of Q, r and w.
2. Calculate the partial derivative of the cost function at its minimum * (, , ) with respect to r, w and Q and interpret the result
3. How do you explain the results in a) and b)?
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