The production function for water bottling in Lusaka is given by y=min (2K,4L). The firm has hired 20 workers and has 14 units of capital they employ to produce output. a) Identify the production technology used for what about thing in Lusaka. b) Calculate the optimal mix of capital and labour with the associated amount of water bottles that will be produced. C) The wage in the Labour Market from which the firm draws from has increased from K400 to 500 per hour. Explain how it will affect the optimal amount of Labour the firm is going to use
The production function for water bottling in Lusaka is given by y=min (2K,4L). The firm has hired 20 workers and has 14 units of capital they employ to produce output. a) Identify the production technology used for what about thing in Lusaka. b) Calculate the optimal mix of capital and labour with the associated amount of water bottles that will be produced. C) The wage in the Labour Market from which the firm draws from has increased from K400 to 500 per hour. Explain how it will affect the optimal amount of Labour the firm is going to use
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter7: Economies Of Scale And Scope
Section: Chapter Questions
Problem 10MC
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The production function for water bottling in Lusaka is given by y=min (2K,4L). The firm has hired 20 workers and has 14 units of capital they employ to produce output.
a) Identify the production technology used for what about thing in Lusaka.
b) Calculate the optimal mix of capital and labour with the associated amount of water bottles that will be produced.
C) The wage in the Labour Market from which the firm draws from has increased from K400 to 500 per hour. Explain how it will affect the optimal amount of Labour the firm is going to use
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