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The Cobb-Douglas Production Function for a Beer Manufacturer Is Q=1

Question 70

Multiple Choice

The Cobb-Douglas production function for a beer manufacturer is q=1.52L0.6K0.4. If we assume that the firm's capital is fixed at 250 units and the rental rate of capital is $5 per unit, then average fixed cost is


A) $1250.
B) $1250/q.
C) 1.52L0.6(250) 0.4.
D) Unable to determine with information given.

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