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

question 125

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 long-run average total cost of producing 1,500 cups of coffee is $_____.

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

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Current Value

The present worth of an asset or company based on market conditions, differing from historical costs or book value.

End of the First Year

The completion of the first 12-month period of an event or operation, typically used in financial contexts.

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The act of purchasing shares of stock in companies with the expectation of earning dividends or selling the shares at a higher price in the future.