MSQE 2006 MICRO

Posted by priyanka p on Apr 07, 2010; 5:23am
URL: http://discussion-forum.276.s1.nabble.com/Problem-Code-210609MATH-tp3126561p4863092.html

a price taking firm makes machine tools Y using labor and capital according to the production function Y=K^0.25 L^0.25.  Labor can be hired at the beggining of every week while capital can be only hired at the beggining of every month. 1 onth is long period and 1 week is short period.the wage rate per week and rental rate of capital per month are both 10. given info, find short run and long run cost functions of firm. 2nd part-- what is the long run profit maximising no. of machine tools? how many units of labor and capital should the firm hire at the beginning of january?