Suppose $Q = \sqrt { \bar { K } L }$ in the short-run. The firm's short-run fixed cost curve is
A) $S F C = \frac { Q ^ { 2 } } { \bar { K } }$
B) $S F C = \frac { w Q ^ { 2 } } { \bar { K } } + r \bar { K }$
C) $S F C = w Q ^ { 2 }/\bar { K }$
D) $S FC = r \bar { K }$

Question

Quizplus · Accepted Answer

In the short-run, fixed costs are costs that do not change with the level of output. Since $\bar{K}$ is fixed, the fixed cost is $r \bar{K}$, where $r$ is the rental rate of capital.

Suppose Q=KˉLQ = \sqrt { \bar { K } L }Q=KˉL​

Suppose $Q = \sqrt { \bar { K } L }$