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.
Chapter6: Proudction Costs
Section: Chapter Questions
Problem 2SQ
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![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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6d4388d9-d500-459f-b12d-572cf956448e%2F55cad2aa-f8f8-4ad5-9093-a85af19dbc64%2F3iatqrp_processed.png&w=3840&q=75)
Transcribed Image Text: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.
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