A factory that you are managing has an hourly production process that can be represented by the following Cobb Douglas Production function: Q = 2KO.50L 0.5 The price of one unit of capital per hour is $20 and the price of one unit of labour per hour is $20. You have been instructed to have a total cost of $2000 or TC = $2,000. Find the optimal amount of labour and capital that you will be using, and compute the amount of output.

A factory that you are managing has an hourly production process that can be represented by the following Cobb Douglas Production function: Q = 2KO.50L 0.5 The price of one unit of capital per hour is $20 and the price of one unit of labour per hour is $20. You have been instructed to have a total cost of $2000 or TC = $2,000. Find the optimal amount of labour and capital that you will be using, and compute the amount of output.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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