A firm has a production function of Q = KL + L, where MPL = K...

A firm has a production function of Q = KL + L, where MPL = K + 1 and MPK = 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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Expert Solution

Rahul Sunny answered 1 year ago

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