Suppose that firms face the following production function: Q = L+7* +K+/*. Suppose also that price of labor (L)=w=8 and price of capital (K)=r=1. If the firm wants to produce 6 units of output, what is the optimum amount of labor, capital and associated cost respectively?

Suppose that firms face the following production function: Q = L+7* +K+/*. Suppose also that price of labor (L)=w=8 and price of capital (K)=r=1. If the firm wants to produce 6 units of output, what is the optimum amount of labor, capital and associated cost respectively?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Suppose that firms face the following production function: Q = L/4 + K/4 Suppose also that price of
labor (L)=w=8 and price of capital (K)=r=1. If the firm wants to produce 6 units of output, what is the
optimum amount of labor, capital and associated cost respectively?
O 1, 625, 633
256, 16, 2064
16, 256, 384
81, 81, 729

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