A Firm Has a Production Function of Q = KL

question 4

Essay

A firm has a production function of Q = KL + L, where MP_L = K + 1 and MP_K = L. The
wage rate (W) is $100 per worker and the rental (R) is $100 per unit of capital.
a. In the short run, capital (K) is fixed at 4 and the firm produces 100 units of output. What
is the firm's total cost?
b. In the long run, what is the total cost of producing 100 units of output?

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Definitions:

Expressed Due Date

The specific date mentioned in a contract or agreement by which a task must be completed or a payment must be made.

Overdue

Referring to a payment, task, or other obligation not completed or submitted by its expected or agreed-upon deadline.

Fraud

A deliberate deception intended to secure an unfair or unlawful gain.

ABC Company

A placeholder name often used to represent a hypothetical or generic business entity.