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Question: Imagine a firm faces a production function with two inputs, labor and capital. Suppose the wage f...

Show transcribed image text Imagine a firm faces a production function with two inputs, labor and capital. Suppose the wage for labor is $20 per hour and the rental rate for capital is $80 per machine. The production function is given by q = 10L^1/2 K^1/2. Write out the cost function (isocost line) the firm faces. C = Suppose the firm has a contract to supply 1000 units of output. What is the cost minimizing combination of L and K? L = K = Does the production function have increasing, decreasing, or constant returns to scale? Returns to scale =

Imagine a firm faces a production function with two inputs, labor and capital. Suppose the wage for labor is $20 per hour and the rental rate for capital is $80 per machine. The production function is given by q = 10L^1/2 K^1/2. Write out the cost function (isocost line) the firm faces. C = Suppose the firm has a contract to supply 1000 units of output. What is the cost minimizing combination of L and K? L = K = Does the production function have increasing, decreasing, or constant returns to scale? Returns to scale =