It deals with the Production Function . Problem: The Production Function for a Product is given by q=10 K ^1/2 L^1/2 where K is capital and L is Labor and q is output . d. Now suppose w=30 and r= 120. What is the minimum cost of producing q=1000. (You must show your work by clearly writing the equations that you use to derive the cost minimizing levels of L and K.) e) Now suppose that the firm is in the short run and cannot vary the amount of capital.That is, it must use the same amount of capital as in part d).However, the firm wants to produce1200 units of output. How much labor should it use to minimize its cost and what is the minimum cost of producing q =1200
It deals with the Production Function . Problem: The Production Function for a Product is given by q=10 K ^1/2 L^1/2 where K is capital and L is Labor and q is output . d. Now suppose w=30 and r= 120. What is the minimum cost of producing q=1000. (You must show your work by clearly writing the equations that you use to derive the cost minimizing levels of L and K.) e) Now suppose that the firm is in the short run and cannot vary the amount of capital.That is, it must use the same amount of capital as in part d).However, the firm wants to produce1200 units of output. How much labor should it use to minimize its cost and what is the minimum cost of producing q =1200
Chapter10: Cost Functions
Section: Chapter Questions
Problem 10.3P
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It deals with the Production Function .
Problem: The Production Function for a Product is given by q=10 K ^1/2 L^1/2 where K is capital and L is Labor and q is output .
d. Now suppose w=30 and r= 120. What is the minimum cost of producing
q=1000. (You must show your work by clearly writing the equations that you use to derive the cost minimizing levels of L and K.)
e) Now suppose that the firm is in the short run and cannot vary the amount of capital.That is, it must use the same amount of capital as in part d).However, the firm wants to produce1200 units of output. How much labor should it use to minimize its cost and what is the minimum
cost of producing q =1200
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