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15 February, 19:16

Suppose the long-run cost function is C = 3q. What is the cost-output elasticity for this case?

A. 1/3

B. 3

C. 2

D. 1

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Answers (1)
  1. 15 February, 19:28
    0
    D. 1

    Explanation:

    C = 3q

    differentiating:

    dC/dq = 3

    then:

    the cost-output elasticity = dC/dq*q/C

    = 3*q/3q

    = 1

    Therefore, The cost-output elasticity for this case is 1.
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