Calculus Worked-Out Problem 9.4:
The Problem
Suppose that Hannah and Sam’s short-run and long-run cost functions are
( )
( )
( ) and
. (Note that in the short run they have a $5,000
sunk cost. These are the short-run and long-run cost functions derived in Worked-Out Problem
8.4.) What are their short-run and long-run supply functions?
The Solution
Start by deriving the short-run and long run marginal costs:
Then proceed as described in the answer to Worked-Out Problem 9.4.
and