The long-run average total cost of producing 100 units

Reference no: EM13874399

A firm's production function is given by Q = KL, where MP_L = K and MP_K = L. The wage rate (W) = $50 and the rental rate per unit of capital (R) is $12.50. In the short run, capital (K) is fixed at 10 units. The short-run average total cost of producing 100 units of output is ______, and the long-run average total cost of producing 100 units of output is ______.

A.	$14.75; $9
B.	$14.75; $8.80
C.	$6.25; $4.20
D.	$6.25; $5

Reference no: EM13874399

Questions Cloud

The firm experience economies of scale : The firm's long-run total cost is given by and long-run marginal cost is given by LMC = 100 - 20Q + Q2. At what output level does the firm experience economies of scale?

What mechanisms would you suggest for recovery and why : Can you explain why incumbents should or should not be allowed to recover their stranded assets? What mechanisms would you suggest for recovery? Why?

Allocate the cost by using direct method : GB Service Corporation has two service departments, Administration and Accounting, and two operating departments, East and West. Administration costs are allocated on the basis of employees, and Accounting costs are allocated on the basis of number o..

The total industry output at a market price : In a perfectly competitive market with 2,000 firms, output is zero at prices less than $10. At prices greater than or equal to $10 and less than $20, each firm will produce 100 units of output. At any price greater than or equal to $20, each firm wil..

The long-run average total cost of producing 100 units : A firm's production function is given by Q = KL, where MPL = K and MPK = L. The wage rate (W) = $50 and the rental rate per unit of capital (R) is $12.50. In the short run, capital (K) is fixed at 10 units. The short-run average total cost of produci..

Development of political structures in the united states : How did historical regional differences affect the development of political structures in the United States? .What examples do you see in current times of how these events affected the U.S. development of culture and society? Paragraph

What would be the optimal prices at the given capacity : What is the socially optimal capacity? What would be the optimal prices at this capacity? Why does Pd > Pn? If PPPC had access to this technology, but still had the capacity of part (a), what would be the socially optimal prices?

Free entry in a perfectly competitive industry results : Free entry in a perfectly competitive industry results in the industry's firms earning zero economic profit in the long run, except for the most efficient producers, who may earn economic rent.

What would be the equilibrium price and quantity explain : a) If the monopoly can't separate both markets, then what would be the equilibrium price and quantity? Explain.b) Does the firm make a profit? If yes, how much is it? Explain.c) If the monopoly can separate both markets, then what type of price discr..

User Account

All Pages