Question

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

Answer 1

Answer:

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.