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 = K0.5L0.5. 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 (APK) using 25 units of capital is:

1.00

1.25

There is insufficient information to determine the average product of capital

.49

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