nestion # 1: (20) (a) Suppose a Firm produce output using the production function Q-5KL. Wage rate for hiring labor 200 an hour and cost of using capital is 100 per hour. (i) Find out the optimal quantities of labor (L') & capital (K’) to produce 1000 unit of output?. (ii) Also show the result graphically and interpret. (b) Explain the concept of Isoquant and Isocost line in firm theory. Mathematically derive the slope of isocost line and Isoquant and interpret.
nestion # 1: (20) (a) Suppose a Firm produce output using the production function Q-5KL. Wage rate for hiring labor 200 an hour and cost of using capital is 100 per hour. (i) Find out the optimal quantities of labor (L') & capital (K’) to produce 1000 unit of output?. (ii) Also show the result graphically and interpret. (b) Explain the concept of Isoquant and Isocost line in firm theory. Mathematically derive the slope of isocost line and Isoquant and interpret.
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter7: Production And Cost In The Firm
Section7.A: Appendix: A Closer Look At Production And Cost
Problem 1AQ
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