Hannah and Sam run Moretown Makeovers, a home remodeling business. The number of square feet they can remodel in a week isdescribed by the Cobb-Douglas production functionQ = F(L, K)Q = 10L0.25 K0.25where Lis their number of workers and K is units of capital. The wage rate is $160 per week and a unit of capital costs $100,000 perweek. Suppose that when initially producing 10 square feet a week, they use 0.04 unit of capital.a. What is their short-run cost of remodeling 100 square feet per week?Instructions: Round your answer to the nearest whole number.b. What is their short-run average cost of remodeling 100 square feet per week?Instructions: Round your answer to the nearest whole number.c. What is their long-run cost of remodeling 100 square feet per week?Instructions: Round your answer to the nearest whole number.d. What is their long-run average cost of remodeling 100 square feet per week?Instructions: Round your answer to the nearest whole number.%24%24

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Hannah and Sam run Moretown Makeovers, a home remodeling business. The number of square feet they can remodel in a week is described by the Cobb-Douglas production function Q = F(L, K) Q = 10L0.25 K0.25 where L is their number of workers and K is units of capital. The wage rate is $160 per week and a unit of capital costs $100,000 per week. Suppose that when initially producing 10 square feet a week, they use 0.04 unit of capital. a. What is their short-run cost of remodeling 100 square feet per week?

Hannah and Sam run Moretown Makeovers, a home remodeling business. The number of square feet they can remodel in a week is described by the Cobb-Douglas production function Q = F(L, K) Q = 10L0.25 K0.25 where L is their number of workers and K is units of capital. The wage rate is $160 per week and a unit of capital costs $100,000 per week. Suppose that when initially producing 10 square feet a week, they use 0.04 unit of capital. a. What is their short-run cost of remodeling 100 square feet per week?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter11: Profit Maximization

Section: Chapter Questions

Problem 11.9P

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