A firm produces cellular telephone service using equipment and labor. When it uses E machine-hours of equipment and hires L person-hours of labor, it can provide up to Q units of telephone service. The relationship between Q, E, and L is as follows: Q=(EL) . The firm must always pay PEfor each machine-hour of equipment it uses and PLfor each person-hour of labor it hires. Suppose the production manager is told that he can spend $200 thousands to choose E and L.

Which of the following is true?

• A.The constrained optimization problem is
• Maximize Q=(EL) =200
• Subject to the constraint PEE + PLL =200
• B.The constrained optimization problem is
• Minimize PEE + PLL
• Subject to the constraint Q=(EL) =200
• Where the exogeneous variables are Q,PEandPL
• C.The constrained optimization problem is
• Minimize PEE + PLL=200
• Subject to the constraint Q=(EL) =200
• D.The constrained optimization problem is
• Maximize Q=(EL)
• Subject to the constraint PEE + PLL =200
• Where the exogeneous variables are Q,PEandPL.
• E.None of the above.