A Coffee Shop's Production Function Is Given by Q =

question 159

Multiple Choice

A coffee shop's production function is given by Q = KL, where MP_L = K and MP_K = L. The barista wage rate is $10 and the rental per square foot is $15. In the short run, store size is fixed at 500 square feet. The short-run average total cost of serving 1,500 cups of coffee is $_____.

• A) 6.03
• B) 5.02
• C) 2.34
• D) 0.63

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