Suppose Firm C is an automobile manufacturer. Firm C can use workers (N) and/or automated robots (K) to assemble auto parts and produce cars (Q). For simplicity, assume that the cost of procuring auto parts is zero so that we can focus solely on the assembly stage. Firm C's production function to assemble a car using workers and robots can be expressed as below. Q=10 (N +2.5K). The cost of hiring one worker is w and the cost of using a robot is r. Therefore, Firm C's total cost can be expressed as wN + rK. The price of a car is normalized to p=1.