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. Consider a firm producing widgets using capital and labor. The graph below illustrates the isoquant for producing 10 widgets, the firm's total cost line,
. Consider a firm producing widgets using capital and labor. The graph below illustrates the isoquant for producing 10 widgets, the firm's total cost line, and the cost-minimizing combination of capital and labor used to produce 10 widgets given the wage and cost of capital. 4.1 Suppose the wage rate (w) is $10 and the rental rate of capital (v) is $15. What is the average total cost of producing 10 widgets when they are produced with minimum cost? (10 Points) 4.2 What is the rate of technical substitution (RTS) at the point K =6 and L = 8? How do you know? (10 Points) 4.3 Suppose that, at K = 6 and L = 8, the marginal product of labor is 20. Continue using w = $10 and v = $15. What is the marginal product of capital at this point? How do you know? (10 Points)
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