Question: The following table summarizes the short-run production function for your firm. Your product (Q) sells for $50 per unit, labor (L) costs $5 per unit, and the rental price of capital is $25 per unit. Lastly, assume capital and labor are used only in whole units, i.e. it is not possible to use 1.37 units of capital or labor, but instead 1, 2, 3, … units are used. Complete the following table, and then answer the accompanying questions.

a. Fill in the missing values in the above table.

b. Which inputs are fixed inputs? Which are the variable inputs? Explain.

c. How much are your average fixed costs at an output of 30? Show your calculations.

d. How many units of the variable input should be used to maximize profits? Explain.

e. What are your maximum profits? Show your calculations.