Question: The production function for a competitive Firm is Q = K^ 0.5* L^ 0.5 . The Firm sells its output at a price of $10,

The production function for a competitive Firm is Q = K^0.5*L^0.5. The Firm sells its output at a price of $10, and can hire labor at a wage of $5. Capital is fixed at 25 units. Rent = $1. The average product of capital using 25 units of capital is:

A. 1.00

B. 0.49

C. There is insufficient information to determine the average product of capital

D. 1.25

determine the maximum profits for the Firm:

A. +$100

B. +$475

C. +$25

D. +$250

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