Question
An ice cream vendor has the following production function: Q = LM = Where, Q the number of ice cream cones produced per day,
An ice cream vendor has the following production function: Q = LM = Where, Q the number of ice cream cones produced per day, L = the number of workers hired per day, and M = the number of ice cream machines rented per day. Associated with this production function are the following marginal product relationships: MP = M and MP = L. M a) Plot the isoquant for 80 ice cream cones per day. b) Find the optimal combination of inputs, if the wage rate machine rental per day = per day $30, the ice cream = = $150, and 80 ice cream cones are to be produced.
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Get StartedRecommended Textbook for
Microeconomics
Authors: Austan Goolsbee, Steven Levitt, Chad Syverson
1st Edition
978-1464146978, 1464146977
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