Question
The processing of payroll for the 35,000 workers in a large firm can either be done (i) using computer time (denoted by K ) and
The processing of payroll for the 35,000 workers in a large firm can either be done
(i) using computer time (denoted byK) and no clerks or
(ii) using the clerical time (denoted byL) and no computer time, or (iii) using the combination of K and L. Computers and clerks are perfect substitutes. The firm can process the payroll for every 5,000 workers using 2 hours of computer time and no clerks or with 7hours of clerical time and no computer time. Suppose computer time costs $21per hour and clerical time costs $7per hour.Also, suppose that L is measured on the vertical axis.The slope of the isoquant is?. To minimize the cost, the firm will process the payroll for the 35,000 workers using?hours of computer time and?hours of labour time. The firm's minimum cost necessary to process the payroll is $?.
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