ZuoTi.Pro
Question

Suppose a firm has the production function Q = 50KL with MP, = 50K and MP, = 50L .
1) If the wage rate is $10 per unit of labor and the rental rate of capital is $5 per unit of capital, how much capital and l
business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

D At optimum, pe Sok. 10 - ml o ) K = 24 Q = 40000 - So (22) 1²=400 =) L = 20 k = 2 (20) = 40 2 Total cost = - 10/20) + yoo 5

0 0
Add a comment
Know the answer?
Add Answer to:
Suppose a firm has the production function Q = 50KL with MP, = 50K and MP,...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • 3. Suppose a firm has the production function Q = 50 KL 1) If the wage...

    3. Suppose a firm has the production function Q = 50 KL 1) If the wage rate is $10 per unit of labor and the rental rate of capital is $5 per unit of capital, how much capital and labor should the firm employ in the long run to minimize the cost of producing 40,000 units? 2) Using the solution in part 1), what will the firm’s long-run total cost be?

  • Suppose that a firm has a production function given by: ? = ?^?.???^?.? . The wage...

    Suppose that a firm has a production function given by: ? = ?^?.???^?.? . The wage rate is $18 and the rental rate is $9. 12. Suppose that the firm has 4 units of capital in the short run. Find the short run total cost function. ________________________________ 13. Find the marginal product of labor (MPL) function. ________________________________ 14. Solve the optimization condition for K and write that equation. ________________________________ 15. Suppose the firm wants to minimize the cost of producing...

  • A firm produces gizmos according to the production function Q=10KL, where is the quantity of gismos...

    A firm produces gizmos according to the production function Q=10KL, where is the quantity of gismos produced, K is the quantity of capital rented and L is the quantity of labour hired. The manager has been given a production target: Produce 9,000 gizmos per day. He is informed that the daily rental price of capital is $400 per unit and the wage rate is $200 per day. a) Currently, the firm has 10 units of capital. How many workers should...

  • A firm produces gizmos according to the production function Q =10KL , where Q is the...

    A firm produces gizmos according to the production function Q =10KL , where Q is the quantity of gismos produced, K is the quantity of capital rented and L is the quantity of labour hired. The manager has been given a production target: Produce 9,000 gizmos per day. He is informed that the daily rental price of capital is $400 per unit and the wage rate is $200 per day. a) Currently, the firm has 10 units of capital. How...

  • Suppose that a firm is producing in the short run with output given by: Q =...

    Suppose that a firm is producing in the short run with output given by: Q = 50L - 50L? The firm hires labor at a wage of $50 per hour and sells the good in a competitive market at P = $10 per unit. Find the firm's optimal use of labor. Enter as a value.

  • 5. Suppose a firm has the production function Q=K1/2 [4M1/4 The wage rate w=16, rental rate...

    5. Suppose a firm has the production function Q=K1/2 [4M1/4 The wage rate w=16, rental rate r=2, and the price of the materials m=1. 1) Suppose in the short run, K is fixed at K*. What's the solution to the firm's short run cost-minimization problem? 2) What is the solution to the firm's long run cost minimization problem given that the firm wants to produce Q units of output? 3) Suppose that Q = 10,K* = 20. Compare the long...

  • Suppose the firm's production function is Q = K1/3L2/3. a. If the rental rate of capital...

    Suppose the firm's production function is Q = K1/3L2/3. a. If the rental rate of capital R = $30 and the wage rate W = $40, what is the cost-minimizing capital-to-labor ratio? b. If the rental rate of capital R is $35 and the wage rate W is $70, and assuming the same production function, how many units of labor and capital should the firm use to produce 12 units of output? c. What is the total cost of producing...

  • Suppose a firm has the following production function: Q = 2K L. The marginal product of...

    Suppose a firm has the following production function: Q = 2K L. The marginal product of capital is 2L, and the marginal product of labor is 2K. Assume that capital rents for $100 per unit per day, that labor can be hired for $200 per unit per day, and that the firm is minimizing costs. a. The firm will hire units of labor and - units of capital. b. What is the total cost of producing 60 units of output?...

  • 5. A firm produces widgets with production function: q-2vKL. In the short run, the firm's amount...

    5. A firm produces widgets with production function: q-2vKL. In the short run, the firm's amount of capital is fixed at K = 100. The rental rate is v = 1 and the wage for L is w= 4. (a) Find the firm's short-run total cost curve (SRTC), short-run average cost curve (SRAC), and the short-run marginal cost (SMC) function. (b) Graph the firm's SAC and SMC using the following levels of production: q 25 and q= 100. (c) Find...

  • 5) A firm producing hockey sticks has a production function given by F(L,K) = 2 LK...

    5) A firm producing hockey sticks has a production function given by F(L,K) = 2 LK . In the short-run, the firm's amount of capital equipment is fixed at K = 100. The rental rate of capital is r=$1, and the wage rate of labor is w=$4. a. Derive the firm's short-run total cost curve. What is the short-run average total cost? What is the short-run average variable cost? b. Find the short-run marginal cost function. What are the total...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT