Suppose that a firm has production function F(L, K) = L2/3 K1/3 for producing widgets, the wage rate for labor is w = $400, and the rental rate of capital is r = $25. d) Determine this firm’s minimum cost of producing 120 units. e) Now suppose that the firm’s production goal is left as the variable Q. Come up with the firm’s cost function C(Q). Show your work.
Suppose that a firm has production function F(L, K) = L2/3 K1/3 for producing widgets, the wage rate for labor is w = $400, and the rental rate of capital is r = $25. d) Determine this firm’s minimum cost of producing 120 units. e) Now suppose that the firm’s production goal is left as the variable Q. Come up with the firm’s cost function C(Q). Show your work.
Chapter8: Production And Costs
Section: Chapter Questions
Problem 11QP
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Suppose that a firm has production function F(L, K) = L2/3 K1/3 for producing widgets, the
wage rate for labor is w = $400, and the rental rate of capital is r = $25.
d) Determine this firm’s minimum cost of producing 120 units.
e) Now suppose that the firm’s production goal is left as the variable Q. Come up with the firm’s cost
function C(Q). Show your work.
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