2. A firm's production function is Q = L0.5K 0.5. It is the short run and K is fixed at 100. The wage is 10 and the rental rate (cost of capital) is 5. a. Find marginal cost as a function of Q (not as a function of L, although using L might help you find the answer).| b. How much output does the firm produce if the price of output is 20? Calculate profit if the price of output is 20.

2. A firm's production function is Q = L0.5K 0.5. It is the short run and K is fixed at 100. The wage is 10 and the rental rate (cost of capital) is 5. a. Find marginal cost as a function of Q (not as a function of L, although using L might help you find the answer).| b. How much output does the firm produce if the price of output is 20? Calculate profit if the price of output is 20.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 21P

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