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Suppose a firm has the production function: Q=2KL, where K is capital, L is labor and...

Suppose a firm has the production function: Q=2KL, where K is capital, L is labor and Q is quantity. If capital is fixed at 4 in the short run. Suppose the cost of a unit of capital is $2 (r=2), and the cost of a unit of labor is $4 (w=4). What is the short run total cost function in terms of Q?

A. TC=4+Q

B. TC=4+0.5Q

C. TC=8+Q

D. TC=8+0.5Q

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Answer #1

Q = 2KL Kika 4 (fined) rz 2 We 24 Since Q2 2KL Q = 2x4 XL [:K= 4 (fixed) 018 Short sur Cost function can be given by (TEC)= W

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