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Solution) Company A builds and sells widgets. It uses two inputs, labor (L) and capital (K). The production fu

Question: Company A builds and sells widgets. It uses two inputs, labor (L) and capital (K). The production function for widgets, W, is given by

W = 5L^1/2 K.

a. Complete the following table showing the amount of W produced with each combination of inputs.

	K=0	K=1	K=2	K=3	K=4	K = 5
L = 0
L = 1
L = 2
L = 3
L = 4
L = 5

b. Does the production function for widgets exhibit decreasing, increasing, or constant returns to scale? Explain your answer.

c. Are the marginal products of K and L increasing, decreasing, or constant? Explain.

d. Assume the price of labor is $50 and the price of capital is $100, what are the short run total, average, and marginal cost curves assuming capital is fixed at 2 units?

Price: $2.99

Solution: The answer consists of 3 pages
Solution Format: Word Document

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Solution) Company A builds and sells widgets. It uses two inputs, labor (L) and capital (K). The production fu

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