2. A firm has a production function of q= 0.25KL05 and in the short-run capital is fixed at 100 (K = 100). The rental rate of capital = =r= $100. The wage rate = w= $25 а. Write the equation for the short-run production function. b. What is the firm's short-run demand for labor (L as a function of output)? а. What are the equations for the firm's short-run total costs (TC as a function of q), short-run average total costs (ATC as a function of q), and short-run marginal costs (MC as a function of q)?

2. A firm has a production function of q= 0.25KL05 and in the short-run capital is fixed at 100 (K = 100). The rental rate of capital = =r= $100. The wage rate = w= $25 а. Write the equation for the short-run production function. b. What is the firm's short-run demand for labor (L as a function of output)? а. What are the equations for the firm's short-run total costs (TC as a function of q), short-run average total costs (ATC as a function of q), and short-run marginal costs (MC as a function of q)?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A competitive firm produces output using three fixed inputs and one variable input. The firm’s short-run production function is q = 200x − 3x^2, where x is the amount of variable input used. The price of the output is $5 per unit and the price of the variable input is $10 per unit. In the short run, how many units of x should the firm use?
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0.250.75 Suppose that a firm had a production function given by: q=LK (r) is $5. The wage rate (w) is $10 and the rental rate Calculate the amount of labor the firm would hire when it produces 400 units of output in a cost-minimizing way. (Round to the nearest 2 decimal places if necessary.) Answer:
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Lesson 8 - Costs Question 6