The Cobb-Douglas Production Function for a Beer Manufacturer Is Q=1

question 70

Multiple Choice

The Cobb-Douglas production function for a beer manufacturer is q=1.52L^0.6K^0.4. If we assume that the firm's capital is fixed at 250 units and the rental rate of capital is $5 per unit, then average fixed cost is

• A)$1250.
• B)$1250/q.
• C)1.52L^0.6(250)^0.4.
• D)Unable to determine with information given.

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