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Please calculate the correct answers and briefly explain why Suppose a rm is currentl';.-r using the production function :3? (L1. K) 2 LEE, where each
Please calculate the correct answers and briefly explain why
Suppose a rm is currentl';.-r using the production function :3? (L1. K) 2 LEE, where each workers'wege is $13 and each piece of capital costs $3? to rent. The rm would like to produce es units of output at the lowest cost possihle. You've been provided with the following equations for MPL end MPK: JittPL2K2 and MPKzLK To produce 95 units of output at the lowest cost, the rm should use units of L and units of K. Your answer should include only;F numbers. Round to the nearest integer; if necessaryc Their total cost of producing 9s units of output is $ . Do not include the $sign in your answer. Round to the nearest integer, if necessary. Claire uses farming equipment and gardeners to maintain her organic farm. Each gardener is paid $120 per week and each piece of framing equipment costs $60 per week to rent. She can minimize her cost of maintaining 150 acres of farmland (q = 150) with 15 gardeners and 20 pieces of equipment. To maintain 400 acres of farmland at the lowest cost, she uses 30 gardeners and 40 pieces of equipment. Finally, the use of 45 gardeners and 60 pieces of equipment enables her to maintain 900 acres of farmland at the lowest cost possible. Part a: Roughly illustrate Claire's isoquant and isocost line graph and the LRAC curve using the information above. You must properly label the axis and the curves, including the numerical values of axis intercepts. Part b: What type of returns to scale (choose from: increasing, decreasing, constant) and economies of scale (choose from: economies of scale, diseconomies of scale, neither economies or diseconomies of scale) is her farm experiencing? Use 1-2 sentences to explain how you arrived at your answer. Part c: Suppose q = 400. How should Claire adjust her output if her objective is to produce at the minimum efficient scale? Use 1-2 sentences to explain how you arrived at yourStep by Step Solution
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