Question
Semi-Con, a semi-conductor production firm, is trying to find the cheapest way to produce their product. Their production function is Q(L, K) = 2 L
Semi-Con, a semi-conductor production firm, is trying to find the cheapest way to produce their product. Their production function is Q(L, K) = 2 LK , where L is the number of labor hours used and K is the number of capital hours used. This function has the resulting marginal products of labor of MPL = K/L and marginal product of capital MPK = L/K . They face prices of 20 dollars per hour for labor and 5 dollars per hour for capital. If they want to produce 12 semi-conductors at minimum cost, what input amounts should they pick and what will the cost be?
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