Suppose a production function is q = K^(1/2)L^(1/3) and in the short run capital (K) is fixed at...
Question:
Suppose a production function is {eq}q = K^{1/2}L^{1/3} {/eq} and in the short run capital ({eq}K {/eq}) is fixed at 100. If the wage is $10 and the rental rate on capital is $20, the short run marginal cost is _____.
a. {eq}1000 + q^3 {/eq}
b. {eq}\frac{3q^2}{100} {/eq}
c. {eq}q^3 {/eq}
d. {eq}2q^3 {/eq}
Marginal Cost:
The marginal cost is equal to the change in the total cost divided by the change in quantity, which is also equal to the slope of the total cost equation.
Answer and Explanation: 1
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Marginal Cost: Definition, Equation & Formula
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