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Bess [88]
3 years ago
7

Consider a firm with production function f(L,K)=2L+4K. Assume also that the price of capital r=3 and the price of labor w=2. Wha

t is this firm’s average cost function when both L and K are variable?
Business
1 answer:
In-s [12.5K]3 years ago
4 0

Answer:

b)AC(q)=3/4

Explanation:

Since Marginal product of labor (MPL) =2

And Marginal product of capital (MPK) =4

The price of labor i.e w=2

And, the price of capital i.e R=3

That determines

MPL ÷ W< MPK ÷ R.

Therefore producer will only use capital and k should be Q ÷ 4 and cost will RK i.e. RQ ÷ 4 =3Q ÷4

Hence, average cost is

=TC ÷Q

=3/4.

Here,  Q = quantity and TC = total cost

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Hope this helps!

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4 years ago
Indicate where each item should be presented in the statement of cash flows (indirect method) using these four major classificat
saw5 [17]

Answer:

a.  Payment of interest on notes payable - Operating Activity

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3 0
3 years ago
What is the difference between ancient trade and modern trade ​
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The main difference between traditional trade and modern trade is that, distribution in modern trade is more organized. Retailers often deal directly with manufacturers. Many large retail chains have integrated their services to offer their own brands in groceries and other goods.

Explanation:

6 0
3 years ago
Assume that a firm hires an additional employee. If the marginal product for that employee is greater than for the previous empl
Tom [10]

If the marginal product for that employee is greater than for the previous employee hired, it must be that there are gains from specialization

<h3>What is marginal product ?</h3>
  • The marginal product or marginal physical productivity of an input (factor of production) in economics, and particularly neoclassical economics, is the change in output that results from using one more unit of a specific input (for example, the change in output when a firm's labor is increased from five to six units), assuming that the quantities of other inputs are kept constant.
  • The marginal product is the mathematical derivative of the production function with respect to that input if the output and the input are infinitely divisible, in which case the marginal "units" are infinitesimal.
  • When more of one input, such as labor, is used while maintaining a constant level of the other input, such as capital, the marginal product initially rises according to the "rule" of declining marginal returns.

To learn more about marginal product with the given link

brainly.com/question/13623353

#SPJ4

8 0
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Direct labor and overhead costs incurred to change raw materials into finished products are known as
san4es73 [151]

Answer:

conversion costs

Explanation:

5 0
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