1 EconomicsCost minimization when output is unknown andtotal costs are known. A factory that you aremanaging has an hourly production process thatcan be represented by the following CobbDouglas Production function: Q = 2K0.50L 0.5The price of one unit of capital per hour is $20and the price of one unit of labour per hour is$20. You have been instructed to have a totalcost of $2000 or TC = $2,000. Find the optimalamount of labour and capital that you will beusing, and compute the amount of output..

Given information: Q = 2K0.5L0.5 ----------> Production function…

Answered: Cost minimization when output is…

Cost minimization when output is unknown an total costs are known. A factory that you are managing has an hourly production process th can be represented by the following Cobb

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter3: Benefits, Costs, And Decisions

Section: Chapter Questions

Problem 1MC

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Question

Economics
Cost minimization when output is unknown and
total costs are known. A factory that you are
managing has an hourly production process that
can be represented by the following Cobb
Douglas Production function: Q = 2K0.50L 0.5
The price of one unit of capital per hour is $20
and the price of one unit of labour per hour is
$20. You have been instructed to have a total
cost of $2000 or TC = $2,000. Find the optimal
amount of labour and capital that you will be
using, and compute the amount of output..

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