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The production function is q = (10KL)/(K+L) where L = labor, K= capital The cost function...

The production function is q = (10KL)/(K+L)

where L = labor, K= capital

The cost function is C = wL + vK where w = wages and v = cost of capital

Assume K is fixed in the short run at K = 20

a.) Find the short run cost function. Find also the short run average and marginal costs.

b.) The shut-down price is defined as the minimum of average variable cost. For this cost function, what is the shutdown price?

c.) Find the short run supply function. Don't forget to use your answer to part b.

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