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1) Referring to the diagram, answer the following question. Assume that the manager has 3000 units of capital in the short run. Assume that price of...

1) Referring to the diagram, answer the following question. Assume that the manager has 3000 units of capital in the short run. Assume that price of L is 100 per unit and of K is 500 per unit.
a) For input combination “A”, MPK/r is _______ than MPL/w. Explain.
b) Why is the short run expansion path horizontal at K = 3000?
c) What is the short run average cost of producing 20,000 units?
d) What is the long run average cost of producing 20,000 units?

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