2. A firm has a production function of q= 0.25KL05 and in the short-run capital is fixed at 100 (K = 100). The rental rate of capital = =r= $100. The wage rate = w= $25 а. Write the equation for the short-run production function. b. What is the firm's short-run demand for labor (L as a function of output)? а. What are the equations for the firm's short-run total costs (TC as a function of q), short-run average total costs (ATC as a function of q), and short-run marginal costs (MC as a function of q)?
2. A firm has a production function of q= 0.25KL05 and in the short-run capital is fixed at 100 (K = 100). The rental rate of capital = =r= $100. The wage rate = w= $25 а. Write the equation for the short-run production function. b. What is the firm's short-run demand for labor (L as a function of output)? а. What are the equations for the firm's short-run total costs (TC as a function of q), short-run average total costs (ATC as a function of q), and short-run marginal costs (MC as a function of q)?
Chapter11: Profit Maximization
Section: Chapter Questions
Problem 11.9P
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Transcribed Image Text:2. A firm has a production function of
q = 0.25KL0.5 and in the short-run capital is fixed at 100 (K = 100).
%3D
The rental rate of capital =
= $100.
r
The wage rate = w =
= $25
а.
Write the equation for the short-run production function.
b.
What is the firm's short-run demand for labor (L as a function of output)?
What are the equations for the firm's short-run total costs (TC as a function of q),
short-run average total costs (ATC as a function of q), and short-run marginal costs (MC as a
function of q)?
а.
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