The following table summarizes the short run production function for your firm. Your product sells for $10 per unit, labor costs $40 per unit and the rental price is $10 per unit. Complete the following table and answer accompanying questions.
L K Q MPL APL APK VMPL
0 5 0
1 5 20
2 5 60
3 5 120
4 5 160
5 5 180
6 5 190
7 5 190
8 5 180
9 5 160
10 5 120
11 5 60
A. Which Inputs are fixed inputs? Which are variable inputs?
B. How much are your fixed costs?
C. What is the variable cost of producing 40 units of output?
D. How many units of the variable input should be used to maximize profits?
E. What are your maximum profits.