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Cost function for a fixed level of capital

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Reference no: EM131311206

Martin decides to open a new factory, his production function for the new factory is q = kl.

a) Find his short-run cost function for a fixed level of capital, .

b) Suppose that w = 10, R = 20 and capital is fixed to 5 units in the short run (k ), find the short-run marginal cost function and short-run average cost function.

c) Identify the variable cost and the fixed cost of the short-run cost function.

d) Find the point where short-run marginal cost equals short-run average variable cost.

e) Plot the SMC and the SAVC

Reference no: EM131311206

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