A firm has a production function given by 
. Suppose that each unit of capital costs R and each unit of labor costs W.
a. Derive the long-run demands for capital and labor.
b. Derive the total cost curve.
c. Derive the long-run average and marginal cost curves.
d. How do marginal and average costs change with increases in output? Explain.
Definitions:
Financial Instruments
Contracts that give rise to both a financial asset of one entity and a financial liability or equity instrument of another entity, including stocks, bonds, and derivatives.
Corporate Expansion
The process by which a company grows through increasing sales, acquiring new businesses, or entering new markets.
Securities Transactions
Deals or operations involving the buying, selling, or exchange of securities, such as stocks and bonds, between parties.
Five Years
A period consisting of five consecutive years.
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