Question: Problem 1 (20 marks) Suppose the production function is given as Q = K + L. Suppose also that the price of labor w =

Problem 1 (20 marks) Suppose the production function is given as Q = K + L. Suppose also that the price of labor w = $10 and the price of capital r = $5 . a) What is the long run average and marginal cost functions? (10 marks) b) Suppose now that capital is fixed at a level K and the price of labor w = $2 and the price of capital r = $4. What is the average variable cost and marginal cost functions? (10 marks)

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