Suppose the production is characterized by the function Q(K,L) = 50K05L05. The price of labor is $5 and the price of capital is $20. Find the cost minimizing combination of capital and labor if the manufacturer has an order for 1000 units of output. Put differently, Given: Q = 50KO.5L0.5 w = $5, r = $20 Goal: Produce Qo = 1000 units of output as cheaply as possible.

Suppose the production is characterized by the function Q(K,L) = 50K05L05. The price of labor is $5 and the price of capital is $20. Find the cost minimizing combination of capital and labor if the manufacturer has an order for 1000 units of output. Put differently, Given: Q = 50KO.5L0.5 w = $5, r = $20 Goal: Produce Qo = 1000 units of output as cheaply as possible.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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