Trapper Joe, the fur trader, has found that his production function in acquiring pelts is given by:
q = 2 √H
Where q = the number of pelts acquired in a day, and H = the number of hours Joe’s employees spend hunting and trapping in one day. Joe pays his employees $8 an hour.
a. Calculate Joe is total and average cost curves (as a function of q).
b. What is Joe’s total cost for the day if he acquires four pelts? Six pelts? Eight pelts? What is Joe’s average cost per pelt for the day if he acquires four pelts? Six pelts? Eight pelts?
c. Graph the cost curves from part a and indicate the points from part b. Explain why the cost curves have the shape they do.