Output is produced according to Q = 4LK, where L is the quantity of labor input and K is the quantity of capital input. If the price of K is $10 and the price of L s $5, then the cost-minimizing combination of K and L capable of producing 32 units of output is: L = 2 and K= 4. L = 4 and K = 2.
Output is produced according to Q = 4LK, where L is the quantity of labor input and K is the quantity of capital input. If the price of K is $10 and the price of L s $5, then the cost-minimizing combination of K and L capable of producing 32 units of output is: L = 2 and K= 4. L = 4 and K = 2.
Chapter7: Production And Cost In The Firm
Section: Chapter Questions
Problem 3.7P
Related questions
Question
Transcribed Image Text:Output is produced according to Q = 4LK, where Lis
the quantity of labor input and K is the quantity of
capital input. If the price of K is $10 and the price of L
is $5, then the cost-minimizing combination of K and L
capable of producing 32 units of output is:
L = 2 and K = 4.
L = 4 and K = 2.
L = 1 and K = 8.
L = 8 and K = 1.
L = 2 and K = 2.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
