A company manufactures a product using inputs x, y and z according to the production function Q(x, y, z) = 20x2yz The prices per unit are $4 for x, $2 for y and $1 for z. What quantity of each input should be used in order to manufacture 1200 units of the product (i.e. Q = 1200) at minimum cost?
A company manufactures a product using inputs x, y and z according to the production function Q(x, y, z) = 20x2yz The prices per unit are $4 for x, $2 for y and $1 for z. What quantity of each input should be used in order to manufacture 1200 units of the product (i.e. Q = 1200) at minimum cost?
Chapter4: Economic Evaluation In Health Care
Section: Chapter Questions
Problem 7QAP
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Transcribed Image Text:A company manufactures a product using inputs x, y and z according to the production
function
Q(x, y, z) = 20x2yz
The prices per unit are $4 for x, $2 for y and $1 for z. What quantity of each input should
be used in order to manufacture 1200 units of the product (i.e. Q = 1200) at minimum
cost?
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