Question 33 Consider a firm with production function f(L,K)=3L+8K. Assume that capital is fixed at K=12. Assume also that the price of capital r=10 and the price of labor w=3. Then, the average cost of producing q units is? AC(q)=24/q+1 AC(q)=114/q+9/8 AC(q)=24/q+3 AC(q)=88/q+1/12 AC(q)=24/q+q
Question 33 Consider a firm with production function f(L,K)=3L+8K. Assume that capital is fixed at K=12. Assume also that the price of capital r=10 and the price of labor w=3. Then, the average cost of producing q units is? AC(q)=24/q+1 AC(q)=114/q+9/8 AC(q)=24/q+3 AC(q)=88/q+1/12 AC(q)=24/q+q
Chapter6: Proudction Costs
Section: Chapter Questions
Problem 3SQP
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Question 33
Consider a firm with production function f(L,K)=3L+8K. Assume that capital is fixed at K=12. Assume also that the price of capital r=10 and the price of labor w=3. Then, the average cost of producing q units is?
AC(q)=24/q+1
AC(q)=114/q+9/8
AC(q)=24/q+3
AC(q)=88/q+1/12
AC(q)=24/q+q
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