A Firm Is Currently Producing 1140 Units of Output According

question 66

Multiple Choice

A firm is currently producing 1140 units of output according to the production function q = L^4/3K^1/2 and faces input prices equal to w = $20 and r = $80.In the short run,capital is fixed at 5 units.In the long run,the firm's costs are

• A) lower because the firm substitutes towards more labor and away from capital.
• B) lower because the firm substitutes towards more capital and away from labor.
• C) higher because the firm substitutes towards more labor and away from capital.
• D) higher because the firm substitutes towards more capital and away from labor.

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Definitions:

Amenities

Features that provide comfort, convenience, or pleasure, often used to describe those available in homes, hotels, or on properties.

All Inclusive

A type of accommodation or vacation package deal where the price includes most or all amenities, meals, and activities.

Location

A particular place or position, often considered in a geographical or spatial context.

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An individual under the direction or guidance of a supervisor, often in contexts such as education, counseling, or professional training.