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Bridget's Widgets produces widgets with the production function, y = 1 2, , where a is the quantity of labor input, 2 is the quantity
Bridget's Widgets produces widgets with the production function, y = 1 2, ", where a is the quantity of labor input, 2 is the quantity of capital input, and y is the quantity of output. The per-unit price of labor input is w1 = 20 and the per-unit price of capital input is w2 = 80. What is the shape of Bridget's long run average cost function, AC(y) = C(y) y O Average cost per unit is "U-shaped" (i.e., initially decreases but eventually increases) as output increases. O Average cost per unit decreases monotonically as output increases. O Average cost per unit is constant as output increases. O Average cost per unit increases monotonically as output increases
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