The long-run average cost

The long-run average cost

The long-run average cost for production of hard-disk drives is given by AC(Q) = ?wr(120? 20Q + Q^) where Q is the annual output of a firm, w is the wage rate for skilled assembly labor, and r is the price of capital services. The corresponding long-run marginal cost curve is MC(Q) = ?wr(120 ? 40Q + 3Q^). The demand for labor for an individual firm isL(Q,W,R) = (?r(120Q ? 20Q^+ Q^)) / 2?w

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