A local bakery has the following production function of cakes, Q = K³l*L+/2, The firm currently has 1 oven (K= 1) which costs a total of $2000. In order to produce any output, the firm must hire workers, which cost $5 each. What is the bakery's short-run total cost equation as a function of Q?
A local bakery has the following production function of cakes, Q = K³l*L+/2, The firm currently has 1 oven (K= 1) which costs a total of $2000. In order to produce any output, the firm must hire workers, which cost $5 each. What is the bakery's short-run total cost equation as a function of Q?
Chapter10: Cost Functions
Section: Chapter Questions
Problem 10.3P
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Please see attached image for question. Please note that there is an overline above the "K" in the oven/captial equation (K = 1). It does not show clearly in the image.
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