Suppose that production for good X is characterized by the following production function, Q = K0.5L0.5, where K is the fixed input in the short run. If the per-unit rental rate of capital, r, is $15 and the per-unit wage, w, is $25, then the average fixed cost of using 9 units of capital and 81 units of labor is

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter10: Cost Functions
Section: Chapter Questions
Problem 10.3P
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Suppose that production for good X is characterized by the following production function, Q = K0.5L0.5, where K is the fixed input in the short run. If the per-unit rental rate of capital, r, is $15 and the per-unit wage, w, is $25, then the average fixed cost of using 9 units of capital and 81 units of labor is

$75. incalculable since there is insufficient information to determine the average fixed costs. $80. $5.

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