The problem gives a production function $q = K^{1/2} L^{1/3}$, where $q$ is the quantity of output, $K$ is capital, and $L$ is labor. In the short run, capital is fixed at $K = 100$. The wage rate is $w = $10$, and the rental rate on capital is $r = $20$. We want to find the short-run marginal cost (MC).
2025/7/1
1. Problem Description
The problem gives a production function , where is the quantity of output, is capital, and is labor. In the short run, capital is fixed at . The wage rate is 10r = . We want to find the short-run marginal cost (MC).
2. Solution Steps
First, substitute into the production function:
.
Solve for in terms of :
.
The short-run total cost (STC) is the sum of the variable cost (labor cost) and the fixed cost (capital cost).
Substitute into the STC equation:
The marginal cost (MC) is the derivative of the short-run total cost (STC) with respect to quantity :
3. Final Answer
The short-run marginal cost (MC) is .
The correct answer is a. .