Suppose that a firm produces tables according to the production function Q = 2K6L.4. Wages (w) are $30 per hour and the unit cost of capital (r) is $60 per hour. What is the cost minimizing input combination that can produce Q = 1200 tables? What is the value of total cost? How would your answer change if r decreases to $45 per hour? (Resolve the model and determine the change in total cost).

Suppose that a firm produces tables according to the production function Q = 2K6L.4. Wages (w) are $30 per hour and the unit cost of capital (r) is $60 per hour. What is the cost minimizing input combination that can produce Q = 1200 tables? What is the value of total cost? How would your answer change if r decreases to $45 per hour? (Resolve the model and determine the change in total cost).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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