2. Consider the following information of a hypothetical firm: Q = 100K0.6 L0.8; w = 1; r = 3 A. Solve for the cost-minimizing quantity of capital (K*) and labor (L*), and the minimum cost (C*) if the firm targets to produce 3,000 units of output. (10 pts) B. If target output increases to 6,000 units, solve for the new cost-minimizing quantity of capital and labor, and the minimum cost. (10 pts) C. Graphically illustrate the expansion path for the firm if it decides to increase its target output from 3,000 units to 6,000 units. (10 pts)

2. Consider the following information of a hypothetical firm: Q = 100K0.6 L0.8; w = 1; r = 3 A. Solve for the cost-minimizing quantity of capital (K) and labor (L), and the minimum cost (C*) if the firm targets to produce 3,000 units of output. (10 pts) B. If target output increases to 6,000 units, solve for the new cost-minimizing quantity of capital and labor, and the minimum cost. (10 pts) C. Graphically illustrate the expansion path for the firm if it decides to increase its target output from 3,000 units to 6,000 units. (10 pts)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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