Suppose the long-run cost function is C = 2q². What is the cost-output elasticity for this case? A) 1 B) 2 C) 1/2 D) 4

Name: Suppose the long-run cost function is C = 2q 2 . What is the cost-output elasticity for this case? A) 1 B) 2 C) 1/2 D) 4
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Question

Quizplus · Accepted Answer

The cost-output elasticity is calculated as the percentage change in cost divided by the percentage change in output. For the given cost function C = 2q^2, the elasticity is 2, as the exponent of q in the cost function represents the elasticity.

Suppose the Long-Run Cost Function Is C = 2q2

Suppose the Long-Run Cost Function Is C = 2q²