A firm produces output according to the production function: Q= F(K, L) = 4K + 8L.

A firm produces output according to the production function:

Q= F(K, L) = 4K + 8L.

a. How much output is produced when K= 2 and L = 3?

b. If the wage rate is $60 per hour and the rental rate on capital is $20 per hour, what is the cost-minimizing input mix for producing 32 units of output?

c. If the wage rate decreases to $20 per hour but the rental rate on capital remains at $20 per hour, what is the cost-minimizing input mix for producing 32 units of output?

Expert Solution

Rahul Sunny answered 2 years ago

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