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A firm wants to minimize the cost of producing 2,800 units of output per week. It has hired a production engineer to identify alternative production
A firm wants to minimize the cost of producing 2,800 units of output per week. It has hired a production engineer to identify alternative production technologies that will accomplish this goal. The production technologies use the different combinations of capital (K) and labor (L) that are listed below.
K | 200 | 180 | 160 | 140 | 120 | 100 | 80 | 60 | 40 | 20 | 16 |
L | 16 | 18 | 22 | 28 | 36 | 46 | 60 | 80 | 110 | 160 | 180 |
Assume that the rental price of capital is $10 and the wage rate of labor is $8. Determine the minimum cost of producing 2,800 units of output.
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