Class #6 Handout: Cost Minimization and the Production Process Seton is interested in reducing costs while maintaining quality and patient satisfaction. You have been hired by the Seton Hospital System to improve efficiency. In particular, Seton believes that it is not efficiently combining physician labor hours (L) and physical capital units (K) in producing stent surgeries. Assume that we know that the production function is Q = KL. Assume that the price of L is $1/hr and the price of K is $4 per unit. a. How might Seton use more capital and less labor to install the same stent? What does that real-life tradeoff look like? b. We are going to find the cost minimizing way of producing 100 stent surgeries at Seton. Begin by drawing yourself a picture of how you will solve this problem. Place K on the vertical axis and L on the horizontal axis. c. Write the budget constraint and find the equation of the slope of the isocost line 'dK/dL)