Suppose That Production for Good X Is Characterized by the Following

question 47

Multiple Choice

Suppose that production for good X is characterized by the following production function, Q = K^0.5L^0.5, where K is the fixed input in the short run.If the per-unit rental rate of capital, r, is $25 and the per-unit wage, w, is $15, then the average total cost of using 81 units of capital and 9 units of labor is

• A)$5.
• B)$75.
• C)$80.
• D)there is insufficient information to determine the average total costs.