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Suppose that a firm produces output using the production function Q=0.5L + 1.5K, where L and K represent labor and capital inputs, respectively. Suppose that the cost of L is $10 a unit and the cost of K is $ 25 a unit.
a. What is the optimal bundle of inputs to purchase for production?
b. What would the cost be in terms of Q?
c. What is the marginal cost of production?
d. What would the market price of Q need to be per unit so that the firm could cover its ost be producing and selling this output?
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