Unformatted text preview: ducing 100 square feet a week, they use 2 units
of capital.
a. What is their shortrun cost of remodeling 400 square feet per week? Instructions: Enter your answer as a whole number. $85, 000 b. What is their longrun cost of remodeling 400 square feet per week? Instructions: Enter your answer as a whole number. $40, 000 rev is ed jrl 08112011 Worksheet Section: ShortRun versus Long Run Supply by PriceTaking Firms http://e z to.mhe c loud.mc gr a w hill.c om/hm.tpx? todo= pr intvie w 7/9 1/22/2014 Assignme nt Pr int Vie w Hannah and Sam run Moretown Makeovers, a home remodeling business. The number of square feet they
can remodel in a week is described by the CobbDouglas production function where L is their number of workers and K is units of capital. The wage rate is $100 per week and a unit of
capital costs $2,500 per week. Suppose that when initially producing 100 square feet a week, they use 2 units
of capital.
a. What is their shortrun cost of remodeling 400 square feet per week? Instructions: Enter your answer as a whole number. $ 85,000 b. What is their longrun cost of remodeling 400 square feet per week? Instructions: Enter your answer as a whole number. $ 40,000 rev is e...
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