Question: Widget Corp.'s production function is given by q = 3K + 2L. (a) Does Widget Corp. face constant, increasing or decreasing returns to scale? (b)

Widget Corp.'s production function is given by q = 3K + 2L.

(a) Does Widget Corp. face constant, increasing or decreasing returns to scale?

(b) Find Widget Corp.'s short-run supply curve and long-run MC curve.

(c) If, in the short run, there are a total of 100 firms in the widget industry, all of which look just like Widget Corp., and which behave as price-takers, what is the short run supply curve of widgets? What is the long-run supply curve of widgets? Draw graphs to illustrate your answers.

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