A firm operates in the short run with the production function Q = 10 Kº.5L0.5, where Q is output, K is capital, and L is labor. The price of capital is $100 per unit, and the wage rate is $50 per unit of labor. How many units of capital and labor should the firm use to minimize its total cost while producing 400 units of output?
A firm operates in the short run with the production function Q = 10 Kº.5L0.5, where Q is output, K is capital, and L is labor. The price of capital is $100 per unit, and the wage rate is $50 per unit of labor. How many units of capital and labor should the firm use to minimize its total cost while producing 400 units of output?
Chapter6: Proudction Costs
Section: Chapter Questions
Problem 8SQ
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