Name: Section: Econ 302 Extended Answer 3 /25 You know the following information about a firm's daily operations: MPK = 6L It currently produces 2940 units of output; 9 = 2940 MPL : 6 k it employs 5 units of capital atr =$100 per day; 1 = 100 W = 10 its production function is q = 6KL; MPK is 6L and MPL is 6K 9 = 6K L 10= 5 each employee is paid a wage of $10 per day; raw resources for production cost 1/6 of a dollar per unit. The firm is operating in the short-run, as a result capital is fixed. A.) Using the information above identify the amount of labor that must be employed. Then write the formula for the firm's total costs, average cost per unit, and marginal cost per unit. 2 + 2 1") AC = 0157 +50V Labor is 98 TC: 3 7500 2 MC : 0.5 B.) The firm expects daily sales to remain constant over the long-run. Assuming that the firm wants to minimize ATC, how many units of capital and labor should the firm employ? K = 7 L = 70 C.) Graph the long-run isocost and isoquant line. Be sure to identify the intercepts for the isocost curve and to pick two combinations of capital and labor so that you can show the basic shape of the isoquant line. a ) 2940 = 6 KL ) ( L ) TC - F C + VC + + +500 6 up6 = 98. AC = TC MPE MC ATC 2940 = 6k (1uk) MPLY 2940: 60k- = K = 7 K 1= 10 L= 10 ( 7 ) K L = 70