A firm's production function is given by q = min{M, }, where M is the number of machines and L is the amount of labor that it uses. The price of labor is $1and the price of machines is $4 per unit. The firm's long-run marginal cost curve is
A) upward sloping and gets flatter as Q increases.
B) a straight line with slope 2.
C) a straight line with slope 1.
D) upward sloping and gets steeper as Q increases.
E) a straight line with slope 4.

Question

A firm's production function is given by q = min{M,  }, where M is the number of machines and L is the amount of labor that it uses. The price of labor is $1and the price of machines is $4 per unit. The firm's long-run marginal cost curve is
A) upward sloping and gets flatter as Q increases. 
B) a straight line with slope 2. 
C) a straight line with slope 1. 
D) upward sloping and gets steeper as Q increases. 
E) a straight line with slope 4.

Quizplus · Accepted Answer

The Answer of A firm's production function is given by q = min{M,  }, where M is the number of machines and L is the amount of labor that it uses. The price of labor is $1and the price of machines is $4 per unit. The firm's long-run marginal cost curve is
A) upward sloping and gets flatter as Q increases. 
B) a straight line with slope 2. 
C) a straight line with slope 1. 
D) upward sloping and gets steeper as Q increases. 
E) a straight line with slope 4.

A Firm's Production Function Is Given by Q = Min{M