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Suppose that Poland Spring has the following production function for bottled water:
Q = K+10L1/2
(i) What is the marginal product of capital and marginal product of labor given this production function?
(ii) What is the marginal rate of technical substitution of labor for capital?
(iii) Initially, Poland Spring has 0 units of capital and pays $2 per unit of capital and $3 per unit of labor. What are Poland Spring's short-run total costs as a function of the quantity it produces? What are Poland Spring's short-run average costs and marginal costs?
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