2. Consider the following information of a hypothetical firm: Q = 100K0.6 L0.8; w = :1; r = 3 A. Solve for the cost-minimizing quantity of capital (K*) and labor (L*), and the minimum cost (C*) if the firm targets to produce 3,000 units of output. B. If target output increases to 6,000 units, solve for the new cost-minimizing quantity of capital and labor, and the minimum cost. C. Graphically illustrate the expansion path for the firm if it decides to increase its target output from 3,000 units to 6,000 units.

2. Consider the following information of a hypothetical firm: Q = 100K0.6 L0.8; w = :1; r = 3 A. Solve for the cost-minimizing quantity of capital (K) and labor (L), and the minimum cost (C*) if the firm targets to produce 3,000 units of output. B. If target output increases to 6,000 units, solve for the new cost-minimizing quantity of capital and labor, and the minimum cost. C. Graphically illustrate the expansion path for the firm if it decides to increase its target output from 3,000 units to 6,000 units.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter11: Profit Maximization

Section: Chapter Questions

Problem 11.9P

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