A firm’s production technology is given by the production function q  0.25 LK where L...

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A firm’s production technology is given by the production function q  0.25 LK where L...

A firm’s production technology is given by the production function q  0.25 LK where L represents labor hours, K machine hours and q the amount of output. The market wage and rental rates are, w= $16 and r = $256. The firm is operating in the long run where it can adjust both inputs.

Suppose that the firm currently is using ten labor hours for each machine hour. Is it minimizing its long run total cost? If so why so and if not why not? Explain. If it is not minimizing its long run cost, how should it adjust its input usage? Explain. Provide appropriate calculations.

Please explain step by step.

business economics

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A firm’s production technology is given by the production function q  0.25 LK where L...

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