Steve and Sons Solar Panels has a production function represented by Q = 4KL, where the MPL = 4K and the MPK = 4L. The current wage rate (W) is $8 per hour, and the rental rate on capital (R) is $10 per hour.
In the short run, the plant’s capital stock is fixed at K = 10. What is the cost the firm faces if it wants to produce Q = 200 solar panels?
The firm’s total cost will be $
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What will the firm wish to do in the long run to minimize the cost of producing Q = 200 solar panels?
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What will the firm’s cost of producing 200 solar panels be if Steve and Sons minimizes costs in the long run?
Steve and Sons’ minimum long-run cost of producing 200 solar panels is $ (round answer to two decimal places).
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