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How much labor would it hire if it could sell its output at $50 per unit?

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter7: Proudction Costs

Section: Chapter Questions

Problem 3SQP

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Assume that a firm with 1600 units of capital and a cobb-douglas production function Q = L^1/2K^1/2 pays labor $10 per unit. How much labor would it hire if it could sell its output at $50 per unit?

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The production function for a product is given by q = 100KL. Its marginal product functions are MPL = 100K and MPK = 100L. If the price of capital, r, is $120 per day and the price of labor, w, is $30 per day, what is the minimum cost of producing 20,000 units of output? The minimum cost of producing 20,000 units of output is $. (Round all intermediate results to 3 decimal places and enter your response rounded to two decimal places.)
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