Use following information to answer Q31-Q35 A firm produces output according to the following function: q = f(L, K) = L0.5K0.5 . The cost of labor is $4 per hour and the rental cost of capital is $12 per hour. The production function exhibits
A. constant returns to scale.
B. increasing returns to scale.
C. decreasing retums to scale.
D. increasing returns to scale for small levels of output, then constant retums to scale, and eventually decreasing returns to scale as output increases,

On june 3, teal company sold to chester company merchandise having a sale price of $2,600 with terms of 2/10, n/60, f.o.b. shipping point. an invoice totaling $91, terms n/30, was received by chester on june 8 from john booth transport service for the freight cost. on june 12, the company received a check for the balance due from chester company. prepare journal entries on the teal company books to record all the events noted above under each of the following bases. (1) sales and receivables are entered at gross selling price. (2) sales and receivables are entered at net of cash discounts.