Suppose a production function is given by F(K L) = KL2; the price of capital is $10 and the price of labor $15. What combination of labor and capital minimizes the cost of producing any given output? Archives

Computer Software Business

July 16, 2021
Titus Kasyoki
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A firm has a fixed production cost of $5000 and a constant marginal cost of production of $500 per unit produced., and that labor costs fall by 50% and are expected to stay at that level for a long time. Show graphically how this change in the relative price of labor and capital affects the firm’s expansion path., If the company produced 100000 units of goods what would be its average variable cost?, If the marginal rate of technical substitution is find the optimal level of capital and labor required to produce the 140 units of output, Suppose a production function is given by F(K L) = KL2; the price of capital is $10 and the price of labor $15. What combination of labor and capital minimizes the cost of producing any given output?, Suppose the economy takes a downturn, What is the firm’s total cost function? Average cost? If the firm wanted to minimize the average total cost would it choose to be very large or very small? Explain.

Joe quits his computer programming job, where he was earning a salary of $50,000 per year, to start his own computer software business in a building that he…

Tag: Suppose a production function is given by F(K L) = KL2; the price of capital is $10 and the price of labor $15. What combination of labor and capital minimizes the cost of producing any given output?

Computer Software Business