A firm has the production function F(L, K) = L^(3/4)K^(1/4) The price of labor is $9 and the price of capital is $48. The firm has a production goal of Q =200 units of output. a) Neatly specify this firm’s cost minimization problem, using the particulars associated with this problem. b) Give two equations that an interior solution satisfies, tailoring your equations to the particulars of this problem. c) Solve the two equations for the firm’s optimal choice. Show your work.
A firm has the production function F(L, K) = L^(3/4)K^(1/4)
The
a) Neatly specify this firm’s cost minimization problem, using the particulars associated with this problem.
b) Give two equations that an interior solution satisfies, tailoring your equations to the particulars of this
problem.
c) Solve the two equations for the firm’s optimal choice. Show your work.
d) Determine this firm’s minimum cost of producing 200 units.
e) Now suppose that the firm’s production goal is left as the variable Q. Come up with the firm’s cost
function C(Q). Show your work or justify your answer.
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