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.

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter8: Production And Costs

Section: Chapter Questions

Problem 11QP

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