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Consider a price-taking firm whose production function is given by q = 4 (L/5 + K/8) 1/2 whereL and K denote respectively the amount of
Consider a price-taking firm whose production function is given by
q = 4 (L/5 + K/8)1/2
whereL and K denote respectively the amount of labour and capital the firm uses to produce q units of output.
Suppose the price of labour is w = 17, the price of capital is r= 22 and the price of the firm's output is p=230 .
Determine the amount of capital the firm will use to minimize the cost of producing 1 unit of output at the input prices stated above.
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