Suppose the production function for high quality brandy is given by : Q = √KL Where q is the output of brandy per week and L is labor hours per week ., in the short run K is fixed at 100, so the short run production function is Q = 10√L a. If the capital rents for 10$ and the wage are 5$per hour ., write the short run total cost function. b. How much will the firm produce at a price of 20$ per bottles of brandy ? c. How many labor hours will be hired per week?
Suppose the production function for high quality brandy is given by : Q = √KL Where q is the output of brandy per week and L is labor hours per week ., in the short run K is fixed at 100, so the short run production function is Q = 10√L a. If the capital rents for 10$ and the wage are 5$per hour ., write the short run total cost function. b. How much will the firm produce at a price of 20$ per bottles of brandy ? c. How many labor hours will be hired per week?
Chapter10: Cost Functions
Section: Chapter Questions
Problem 10.7P
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Suppose the production function for high quality brandy is given by : Q = √KL
Where q is the output of brandy per week and L is labor hours per week ., in the short
run K is fixed at 100, so the short run production function is Q = 10√L
a. If the capital rents for 10$ and the wage are 5$per hour ., write the short run total cost
function.
b. How much will the firm produce at a price of 20$ per bottles of brandy ?
c. How many labor hours will be hired per week?
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