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:

Bank Reconciliation

The process of comparing and matching the balances of an entity's accounting records with corresponding bank statements to ensure accuracy.

Journal Entry

A record in the accounting ledger that notes every financial transaction of a business, including the accounts affected and the date of the transaction.

Petty Cash Fund

A small amount of cash on hand used for covering minor expenses, typically managed by a designated petty cash custodian.

Office Supplies

Consumable items and minor equipment used in an office setting, such as paper, pens, and staplers.