Suppose That Production for Good X Is Characterized by the Following

question 14

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 $15 and the per-unit wage,w,is $5,then the average fixed cost of using 16 units of capital and 25 units of labor is:

• A) $9.
• B) $12.
• C) $56.
• D) There is insufficient information to determine the average fixed costs.

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Definitions:

Retail Industry

Comprises businesses that sell goods and services directly to the end consumer for personal, non-business use.

Small Business

An independently owned and operated company that is limited in size and revenue depending on the industry.

Service Providers

Entities that offer an array of services across various sectors, including telecommunications, health, or financial services, to satisfy customer needs.