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.

A firm has the long- run total cost function TC(O) = 24Q + 3Q³ – 12Q2. In the long run, it will supply a positive amount of output, so long as the price is greater than or equal to: a. $15 5 %3D b. $7 c. $3 d. $22 e. $12

2. Suppose a perfectly competitive firm's production function is y = f(x1, x2). The firm aims at minimizing its cost. Which of the following statement is TRUE? A. The firm's technology must exhibit decreasing returns-to-scale. B. The average production cost of the firm must increase as y increases. C. The average production cost function may be concave. D. Suppose the firm becomes subject to the short-run constraint that x, = x2. The short- run total cost curve is always higher than the original long-run total cost curve.

ABC company's total cost when it produces 20 units is $100.  ABC's total cost is $120 when it produces 22 units.  What is ABC's marginal cost of producing the 22nd unit?