Suppose that a firm uses both labour (L)and capital (K)as inputs.The firm's long-run production function is Q = F(L,K)= 5ÖLÖK.If the firm has 100 units of capital,what is its short-run production function?
A) Q = F(K) = 50 ÖK
B) Q = F(L) = 500Ö L
C) Q = F(L,K) = 50Ö LÖK
D) Q = F(L) = 50Ö L

Question

Quizplus · Accepted Answer

In the short run, capital (K) is fixed at 100 units, so the production function becomes Q = 5√L√100 = 5√L*10 = 50√L, which corresponds to option D.

Suppose That a Firm Uses Both Labour (L)and Capital (K)as