Question

Hi please write everything out legibly thank you

Using the cost function TC 3 10Q+50, and a production function Q KAL, K-85, L 120, determine the following 1. Quantity of output 2. Average product of labor 3. Average product of capital 4. Marginal product of labor 5 Marginal product of capital 6. Fixed cost and average fixed cost 7. Variable cost and Average variable cost 8. Total cost and average total cost 9 If capital rental rater 5 and wage rate w 10, is firm minimizing cost by using 100 units or labor and 100 units of capita? Explain your answer. What should the firm do? 10. Write down the firms IsoCost function and sketch it (by hand is fine).

Answer 1

and production function

0.4 r0.6 K = 85, L = 120

1. Quantity of output = (85)^0.4(120)^0.6 = 104.54

2. Average product of labor:

APL =-= K0.4 L-0.4 K = 85, L 120

Q = 850.4120-04-0.871

3. Average product of capital:

-0.6,0.6 K 85, L-120

-0.61 200.6-1.23

4. Marginal product of labor:

0.6K0.4L-0.4 K = 85, L 120

0.6 * 0.871 0.523

5.

Marginal product of capital:

-0.6 0.6 MPL _ _ _ 0.4 K K 85, L 120

0.4* 1.23-0.492

6. Fixed cost = 3

and average fixed cost = 3/Q