Cost minimization when output is unknown an total costs are known. A factory that you are managing has an hourly production process th can be represented by the following Cobb

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question
1
Economics
Cost minimization when output is unknown and
total costs are known. A factory that you are
managing has an hourly production process that
can be represented by the following Cobb
Douglas Production function: Q = 2K0.50L 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..
Transcribed Image Text:Economics Cost minimization when output is unknown and total costs are known. A factory that you are managing has an hourly production process that can be represented by the following Cobb Douglas Production function: Q = 2K0.50L 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..
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Nash Equilibrium
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education