IMPORTANT: The owner chooses to adopt a new technology that changes the cost function to C(q)=4q^2+2q+64. All the competitors follow her lead and choose to adopt the same technology and have the same cost function. They are all price-takers. From now on, use this cost function. A firm faces a production function with inputs capital (K) and labor (L):F(K, L) = K¹/2 1/4The amount of capital used for production is determined at the beginning of the year.The prices of K and L are v and w respectively. What is the price below which the firm chooses to exit the market? (Hint: prices can only bepositive)49273634

In a competitive industry, a firm can only enter the market or exit the market in the long run. Due…

Answered: What is the price below which the firm…

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter7: Production Economics

Section: Chapter Questions

Problem 5E

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IMPORTANT: The owner chooses to adopt a new technology that changes the cost function to C(q)=4q^2+2q+64. All the competitors follow her lead and choose to adopt the same technology and have the same cost function. They are all price-takers. From now on, use this cost function.

A firm faces a production function with inputs capital (K) and labor (L):
F(K, L) = K¹/2 1/4
The amount of capital used for production is determined at the beginning of the year.
The prices of K and L are v and w respectively.

What is the price below which the firm chooses to exit the market? (Hint: prices can only be
positive)
49
27
36
34

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