Charlie's Umbrellas Has a Production Function Given by Q =

question 62

Multiple Choice

Charlie's Umbrellas has a production function given by Q = 10K^0.5L^0.5, where MP_L = 5K^0.5/L^0.5 and MP_K = 5L^0.5/K^0.5. Charlie is using 9 units of capital (K) in the short run. The wage (W) is $80 per day and the rental per unit of capital (R) is $5 per day. What is Charlie's total cost of producing 60 umbrellas?

• A) $445
• B) $365
• C) $108
• D) $276

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