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Output for a simple production process is given by Q = 2KL, where K denotes capital, and L denotes labor. The price of capital is $25 per unit and capital is fixed at 8 units in the short run. The price of labor is $5 per unit. What is the total cost of producing 80 units of output? (need brief reason)
1. $525
2. $200
3. $233
4. $225
Decrease will have on the desired proportions of capital and labor used in producing the given level of output at minimum total cost.
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