You are running a small factory that uses labour (L) and capital (K) to produce output (Q). Your production function is Q space equals space 10 L to the power of bevelled 1 half end exponent K to the power of bevelled 1 half end exponent For every unit of labour you use you have to pay a wage of w - $ 20 and for every unit of capital you use you have to pay a rental rate of r = $5. You've signed a contract that you will produce Q-700 units of output. If you minimize your costs, what amount of labour (L) should you use?

You are running a small factory that uses labour (L) and capital (K) to produce output (Q). Your production function is Q space equals space 10 L to the power of bevelled 1 half end exponent K to the power of bevelled 1 half end exponent For every unit of labour you use you have to pay a wage of w - $ 20 and for every unit of capital you use you have to pay a rental rate of r = $5. You've signed a contract that you will produce Q-700 units of output. If you minimize your costs, what amount of labour (L) should you use?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter11: Profit Maximization

Section: Chapter Questions

Problem 11.9P

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