Miguel and Jake run a paper company. Each week they need to produce 1,000 reams of paper to ship to their customers. The paper plant's long-run production function is: q= 4K%L% where q is the number of reams produced, K is the quantity of capital rented, and L is the quantity of labor hired. K and MPg = 3 L For this production, MP, %3| K The weekly cost function for the paper plant is C= 10K +2L where C is the total weekly cost How much capital and labor will Miguel and Jake need to rent and hire in order to produce 1,000 reams of paper each week, and how much will hiring these inputs cost them?
Miguel and Jake run a paper company. Each week they need to produce 1,000 reams of paper to ship to their customers. The paper plant's long-run production function is: q= 4K%L% where q is the number of reams produced, K is the quantity of capital rented, and L is the quantity of labor hired. K and MPg = 3 L For this production, MP, %3| K The weekly cost function for the paper plant is C= 10K +2L where C is the total weekly cost How much capital and labor will Miguel and Jake need to rent and hire in order to produce 1,000 reams of paper each week, and how much will hiring these inputs cost them?
Chapter9: Production Functions
Section: Chapter Questions
Problem 9.1P
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Transcribed Image Text:Miguel and Jake run a paper company. Each week they need to produce 1,000
reams of paper to ship to their customers. The paper plant's long-run
production function is: q= 4K^L+ where q is the number of reams produced,
K is the quantity of capital rented, and L is the quantity of labor hired.
K
For this production, MP, =|
L
and MP, = 34
K
K
The weekly cost function for the paper plant is C=10K+2L where C is the
total weekly cost
How much capital and labor will Miguel and Jake need to rent and hire in
order to produce 1,000 reams of paper each week, and how much will
hiring these inputs cost them?
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