a. When the production level is at 40,000 units, use the LaGrange process to determine how much they should spend on labor and capital. b. If the purchasing agent requests an additional unit (40,001st unit), what is the minimum price you should charge on that specific unit? (Note: determine this without re-solving the Lagrange problem itself.)
a. When the production level is at 40,000 units, use the LaGrange process to determine how much they should spend on labor and capital. b. If the purchasing agent requests an additional unit (40,001st unit), what is the minimum price you should charge on that specific unit? (Note: determine this without re-solving the Lagrange problem itself.)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A firm has a production function of q=2(LK), where the L represents hours of labor, K represents hours of machine usage and q represents the hourly production volume. Currently the
a. When the production level is at 40,000 units, use the LaGrange process to determine how much they should spend on labor and capital.
b. If the purchasing agent requests an additional unit (40,001st unit), what is the minimum price you should charge on that specific unit? (Note: determine this without re-solving the Lagrange problem itself.)
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