Consider a production function of two inputs, labor and capital given by Q=LK. Let w =5 and r = 1, where w is the price per unit of labor and r is the price per unit of capital. a) Suppose that the firm is required to produce Q units of output. Show how the cost-minimizing quantity of labor depends on the quantity Q? b) If the firm is operating in the short run, with K fixed at 10 units, calculate the short-run total cost of producing 100 units of output?
Consider a production function of two inputs, labor and capital given by Q=LK. Let w =5 and r = 1, where w is the price per unit of labor and r is the price per unit of capital. a) Suppose that the firm is required to produce Q units of output. Show how the cost-minimizing quantity of labor depends on the quantity Q? b) If the firm is operating in the short run, with K fixed at 10 units, calculate the short-run total cost of producing 100 units of output?
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter7: Production And Cost In The Firm
Section: Chapter Questions
Problem 18PAE
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Consider a production function of two inputs, labor and capital given by Q=LK. Let w =5 and r = 1, where w is the price per unit of labor and r is the price per unit of capital.
a) Suppose that the firm is required to produce Q units of output. Show how the cost-minimizing quantity of labor depends on the quantity Q?
b) If the firm is operating in the short run, with K fixed at 10 units, calculate the short-run total cost of producing 100 units of output?
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