Question
Doug wants to go into the donut business. For $700 per month he can rent a bakery complete with all the equipment he needs to
Doug wants to go into the donut business. For $700 per month he can rent a bakery complete with all the equipment he needs to make a dozen different kinds of donuts (K=l). He must pay unionized donut bakers a monthly salary of $300 each. He projects his production function to be Y = 5KL (where Y is tons of donuts).
A) How many donuts does Doug need to produce in order for K=4 to be the optimal level of capital?
B) What is Doug's monthly long-run cost function AND long-run marginal cost?
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Step: 1
To determine the optimal level of capital K where K 4 and to find the monthly longrun cost function ...
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Taxation Of Individuals And Business Entities 2016
Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver
7th Edition
9781259425479, 125942121x, 1259334872, 1259425479, 9781259421211, 978-1259334870
