A firm has a Cobb-Douglas production function, q = 2L^0.5K^0.5 . If it faces prices of w = 20 and r = 40 and its capital is fixed at K (K with line above it) = 100, what are its short-run average fixed cost, average variable cost, and marginal cost functions?

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Isocost and Isoprofit Curve Analysis

An isocost curve in the production theory that is a crucial part of economics depicts different combinations of factor inputs at a given market cost. In other words, this shows all the combinations of production factors that cost the same for the firm to employ. Usually, this can be depicted as a downward sloping straight line when the firms act as the price-takers in the factor markets. The slope of this mainly depicts the relative prices of different production factors.