2. Consider the production functions given below: a. Suppose that the production function faced by a bread producer is given by Q = 4KL, where MPK = 4L and MP, = 4K. i. Do both labor and capital display diminishing marginal products in the short run? Explain. ii. Find the marginal rate of technical substitution for this production function. (Hint: The MRTS MPL MPK iii. Does this production function display a diminishing marginal rate of technical substitution? iv. Graph isoquants for Q = 20, and Q = 40. Put capital (K) on the y-axis and labor (L) on the x- axis. Label the isoquants with their quantities. v. What are the returns to scale for this firm? Explain. 20 19 18 17 16 15 14 13 12 11 10 9 0 1 2 3 4 5 6 00 9 10 11 12 13 14 15

If sales volume increases and all other factors remain constant, then the: O contribution margin ratio will increase. O margin of safety will increase. break-even point will decrease. O net operating income will decrease.

You are an industry analyst that specializes in an industry where the market inverse demand is P = 100 - 2Q. The external marginal cost of producing the product is MCExternal = 8Q, and the internal cost is MCInternal = 18Q.Instructions: Enter your responses rounded to the nearest two decimal places.a. What is the socially efficient level of output? unitsb. Given these costs and market demand, how much output would a competitive industry produce? unitsc. Given these costs and market demand, how much output would a monopolist produce? unitsd. Which of the following are actions the government could take to induce firms in this industry to produce the socially efficient level of output.Instructions: For correct answers place a check mark. check all that apply Nonrival consumptionunanswered Pollution taxesunanswered Pollution permitsunanswered