1. Given the following cost and production functions, find where production is optimized. C = 25x₁ + 5x2 Q = 5x₁²5x75 2. A firm wants to minimize the cost of producing 100 units of output given that the cost of labor (w) is $25 and the cost of capital (r) is $5. Output is produced according to the Cobb-Douglas production function: Q = 5K-5L.5.

1. Given the following cost and production functions, find where production is optimized. C = 25x₁ + 5x2 Q = 5x₁²5x75 2. A firm wants to minimize the cost of producing 100 units of output given that the cost of labor (w) is $25 and the cost of capital (r) is $5. Output is produced according to the Cobb-Douglas production function: Q = 5K-5L.5.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter10: Cost Functions

Section: Chapter Questions

Problem 10.6P

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