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A firm has two plants - one in Adelaide (A) and one in Brisbane (B). Let Q A and QB denote the amounts of output
A firm has two plants - one in Adelaide (A) and one in Brisbane (B). Let Q A and QB denote the amounts of output produced in plants A and B respectively. Production functions in these two plants respectively are QA = V0.5LA, QB = 0.1LB where LA and LBare the amounts of labour used in plants A and B respectively. Let w A and WB denote the price of labour in Adelaide and Brisbane respectively. Suppose WA = land WB = xwhere x = 2 (a) (1 point) Suppose production target is Q = 20 To minimise costs, the firm would choose QA and Q B (b) (0.5 points) Suppose the firm's production target is revised downward to Q = 5 To minimise costs, the firm would choose QA = and Q B
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