You have a small business that uses machines (K) and labour (L) to produce output (Q). You need two workers for every machine, so your production function isQ=min{L,2K}. You have to payw= 25for every unit of labour andr= 400for every machine. You need to produce 6,000 units of outputQ.

1. (a)Write down the long-run "producer's problem" define the objective, any con- straints and what is being chosen to achieve the objective.
2. (b)What quantities of Labour and Captial are demanded?
3. (c)What is minimized total cost?