1. A firm estimates its production function as 2 Q = -2.4 + 20*L -.5*L< + 30*K -1.00*K² + 15*F -.3*F2. Total cost is TC = $2*L+ $2.5*K + $1.75*F. The firm wishes to produce 400 units of output. Use Excel to find the cost minimizing amounts of L, K and F. How much F (Fuel) should the firm use? A.F=7.90. B.F=9.58. C.F=10.75. D.F=12.63. E. F=14.88.

1. A firm estimates its production function as 2 Q = -2.4 + 20L -.5L< + 30K -1.00K² + 15F -.3F2. Total cost is TC = $2L+ $2.5K + $1.75*F. The firm wishes to produce 400 units of output. Use Excel to find the cost minimizing amounts of L, K and F. How much F (Fuel) should the firm use? A.F=7.90. B.F=9.58. C.F=10.75. D.F=12.63. E. F=14.88.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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