1. Firm A produces video contents using digital editing equipment (K) and employed editors (L), where Q in the number of videos. The wage for editor is $25, and the rental rate on equipment is $50. The firm wants to produce 3, 000 videos at the lowest possible cost. Suppose the production function of this firm is below- Q = 30 K^0.6 L^0.4 a. Solve cost minimization problem. b. What is the total cost associated with the output a firm wants to produce? c. Illustrate the result from part (a) and (b). You should draw isoquant line and isocost line. Isoquant line has a shape of the curve convex toward origin.

1. Firm A produces video contents using digital editing equipment (K) and employed editors (L), where Q in the number of videos. The wage for editor is $25, and the rental rate on equipment is $50. The firm wants to produce 3, 000 videos at the lowest possible cost. Suppose the production function of this firm is below- Q = 30 K^0.6 L^0.4 a. Solve cost minimization problem. b. What is the total cost associated with the output a firm wants to produce? c. Illustrate the result from part (a) and (b). You should draw isoquant line and isocost line. Isoquant line has a shape of the curve convex toward origin.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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