2. Given: Q 100K".“L08; w = 50; r = 80; Qo = 2,000 w a. Solve for the MRTSK and the market rate of exchange for inputs (). Interpret your PLK computed values. b. Using Lagrange Multiplier Method, solve for L', K , and C'. c. If target output increases to Q, = 4,000, calculate the effects on the cost-minimizing values of L , K , and C . d. Graphically illustrate the expansion path for the firm if it decides to increase its target output to Q, = 4,000.

2. Given: Q 100K".“L08; w = 50; r = 80; Qo = 2,000 w a. Solve for the MRTSK and the market rate of exchange for inputs (). Interpret your PLK computed values. b. Using Lagrange Multiplier Method, solve for L', K , and C'. c. If target output increases to Q, = 4,000, calculate the effects on the cost-minimizing values of L , K , and C . d. Graphically illustrate the expansion path for the firm if it decides to increase its target output to Q, = 4,000.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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