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Suppose that production for good X is characterized by the following production function, Q = K0.5L0.5, where K is the fixed input in the short
Suppose that production for good X is characterized by the following production function, Q = K0.5L0.5, where K is the fixed input in the short run and the fixed amount of capital is 81 units. Labor is the variable input used and the quantity of labor currently being used is 9 units. The per-unit rental rate of capital, r, is $25 and the per-unit wage, w, is $15, (a) What is the fixed cost of using 81 units of capital and 9 units of labor? Please show your calculations. (b) What is the variable cost of using 81 units of capital and 9 units of labor? Please show your calculations. (c) What is the average total cost of using 81 units of capital and 9 units of labor? Please show your calculations. (d) What is the average variable cost of using 81 units of capital and 9 units of labor? Please show your calculations. (e) What is the average fixed cost of using 81 units of capital and 9 units of labor? Please show your calculations
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