Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The production function of a firm is given by q= KL.Input prices are as follow: rental rate on capital r = 3 and wage is

The production function of a firm is given by q= KL.Input prices are as follow: rental rate on capital r = 3 and wage is w = 2.In long run, both inputs are variables.

a) Please find the combination of the inputs (K &L) that minimizes total cost of producing 200 units of output.What is the total cost of producing 200 units of output? Show your calculation step by step.

b) If the wage rate goes up to 3, find the new combination of the inputs and write down the total cost function. Show your calculation step by step.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Income Tax Fundamentals 2013

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

31st Edition

1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516

Students also viewed these Economics questions