Question: Suppose a firm has the following production function: Q = 2KL. The marginal product of capital for this production function is 2L, and the marginal

Suppose a firm has the following production function: Q = 2KL. The marginal product of capital for this production function is 2L, and the marginal product of labor is 2K. If capital rents for $100 per unit per day, labor can be hired for $200 per unit per day, and the firm is minimizing costs,
a. What is the total cost of producing q units of output?
b. What is the average cost of producing q units of output?
c. What is the marginal cost of producing q units of output?

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a Using the optimality condition we get MP L MP K 2K2L 200100 Wr K 2L Hence the produc... View full answer

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