Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose a firm with a production function given by Q = 30 K 0.5 L 0.5 produces 2,500 units of output. The firm pays a

Suppose a firm with a production function given by Q = 30K0.5L0.5 produces 2,500 units of output. The firm pays a wage of $80 per unit and pays a rental rate of capital of $60 per unit. MPL = 15K0.5/L0.5 and MPK = 15L0.5/K0.5. How many units of labor and capital should the firm employ to minimize the cost of producing 3,000 units of output, and what would be the total cost?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Macroeconomics Canada in the Global Environment

Authors: Michael Parkin, Robin Bade

8th edition

321778103, 978-0321808370, 321808371, 978-0321778109

More Books

Students also viewed these Economics questions

Question

5. It is the needs of the individual that are important.

Answered: 1 week ago

Question

3. It is the commitment you show that is the deciding factor.

Answered: 1 week ago