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Suppose the total cost function for production in the short run is: TC(q)=100+25q2TC(q)=100+25q2 Also, the production function is: q = 10L If a producer wants to make 100 units of the good, then she would need to hire _____ units of labour at a marginal cost of _____ for the last unit and an average variable cost of _____
Suppose the total cost function for production in the short run is:
TC(q)=100+25q2TC(q)=100+25q2
Also, the production function is:
q = 10L
If a producer wants to make 100 units of the good, then she would need to hire
_____ units of labour at a marginal cost of
_____ for the last unit and an average variable cost of
_____.
option 1: 10, 20, or 15
option 2: 100, 500, or 25
option 3: 250, 100, or 500
Expert Solution
100=10L→L=10100=10L→L=10
MC=TC′=50q=50(10)=500MC=TC′=50q=50(10)=500
CC=TVC/q=25q=25(10)=250CC=TVC/q=25q=25(10)=250
L= 10
MC = 500
AC = 250
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