Suppose a production function is q = K1/2L1/3 and in the short run capital (K) is fixed at 100. If the wage is $10 and therental rate on capital is $20, the fixed cost isa. $2,000b. $200c. $20,000d. $0
Suppose a production function is q = K1/2L1/3 and in the short run capital (K) is fixed at 100. If the wage is $10 and therental rate on capital is $20, the fixed cost isa. $2,000b. $200c. $20,000d. $0
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter7: Production Economics
Section: Chapter Questions
Problem 1.5CE
Related questions
Question
Suppose a production function is q = K1/2L1/3 and in the short run capital (K) is fixed at 100. If the wage is $10 and the
rental rate on capital is $20, the fixed cost is
a. $2,000
b. $200
c. $20,000
d. $0
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