Suppose a firm with a production function given by Q = K0.4L0.6 produces 100 units of output. The firm pays a wage of $20 per units and pays a rental rate of capital of $40 per unit. (Note: MPL = 0.6K0.4L-0.4 and MPK = 0.4K-0.6L0.6 ) What is the minimum cost of producing 100 units of output?

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A: * ANSWER :- * A)        at eqm, MRTS = w/r                         MRTS = MPL / MPK

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A:

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A: answer to the question is as follows :

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A: Solution - Dear student Thank you for submitting your question. Since we only answer up to three sub…

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A: Q(L,K)=100L0.4K0.6 C(L,K)=5L+30K w=5 r=30 Q=1000   MPL=dQ/dL=0.4(100)L-0.6K0.6 MPL=40L-0.6K0.6…

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A: The following problem of minimization of cost is solved as follows:

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