Answered step by step
Verified Expert Solution
Question
1 Approved Answer
need steps, explanation, and answer Suppose that a firm's production function is q = 10L /2K/2. The cost of a unit of labor is $20
need steps, explanation, and answer
Suppose that a firm's production function is q = 10L /2K/2. The cost of a unit of labor is $20 and the cost of a unit of capital is $80. a) What is the formula for your marginal rate of technical substitution for L with K (MRTSLK)? (Your answer should be a mathematical formula with the variables L and K in it.) b) If the firm receives a contract to produce 100 units of output, what is the cost-minimizing combination of inputs? C) Now imagine the firm wants to produce 140 units, but the amount of capital is now fixed at the level identified in (b). How many total units of labor will the firm need now?d) In the long run, once capital is a variable input, what will the cost-minimizing combination of inputs be (for producing 140 units)? e) Does this production function (q = 10L /Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started