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q= 1.25P B 4= 1.75P 20. The market for bananas is perfectly competitive. Each firm in this market has the same cost function. The average cost, average variable cost, and marginal cost of each firm is 722 AC(q) +29 q g q=0.75P D q=0.25P = q=P AVC(q) = 24 MC(q) = 49. 22. Firm Kappa uses capital K and labor L to produce output q in a perfectly competitive market. The firm's production function is If the market price is P=320, then each firm will have a profit A Profit = 12,075 F(KL) = - 5K0.3L 0.2 Profit = 12,076 C Profit = 12,072 The prices of capital and labor are r = 6 and w=4, respectively. Moreover, the firm also receives a $1 subsidy for each worker it hires. What is the optimal mix of K and L? D Profit= 12.074 Profit= 12,078 A KEL B 3K = 2L g2K = 3L D 3K = 4L 21. Firm Kappa uses capital K and labor L to produce output q in a perfectly competitive market. The firm's production function is E 4K = 3L F(K,L) - 5K0.3L 0.2 The prices of capital and labor are r= 6 and w=4, respectively. The firm can sell its output at a price P. To maximize its profit, Kappa will optimally choose to supply