A firm wants to minimize the cost of producing 2,800 units of output per week. It has hired a production engineer to identify alternative production technologies that will accomplish this goal. The production technologies use the different combinations of capital (K) and labor (L) that are listed below.
$$\begin{array} { r r r r r r r r r r r r }
K & 100 & 90 & 80 & 70 & 60 & 50 & 40 & 30 & 20 & 10 & 8 \
L & 8 & 9 & 11 & 14 & 18 & 23 & 30 & 40 & 55 & 80 & 90
\end{array}$$ Assume that the rental price of capital is $5 and the wage rate of labor is $4. Determine the minimum cost of producing 2,800 units of output and then show how the combination of inputs that yield the minimum cost can be determined using the marginal approach.

Question

A firm wants to minimize the cost of producing 2,800 units of output per week. It has hired a production engineer to identify alternative production technologies that will accomplish this goal. The production technologies use the different combinations of capital (K) and labor (L) that are listed below.
 $$\begin{array} { r r r r r r r r r r r r } 
K & 100 & 90 & 80 & 70 & 60 & 50 & 40 & 30 & 20 & 10 & 8 \
L & 8 & 9 & 11 & 14 & 18 & 23 & 30 & 40 & 55 & 80 & 90
\end{array}$$ Assume that the rental price of capital is $5 and the wage rate of labor is $4. Determine the minimum cost of producing 2,800 units of output and then show how the combination of inputs that yield the minimum cost can be determined using the marginal approach.

Quizplus · Accepted Answer

The Answer of A firm wants to minimize the cost of producing 2,800 units of output per week. It has hired a production engineer to identify alternative production technologies that will accomplish this goal. The production technologies use the different combinations of capital (K) and labor (L) that are listed below.
 $$\begin{array} { r r r r r r r r r r r r } 
K & 100 & 90 & 80 & 70 & 60 & 50 & 40 & 30 & 20 & 10 & 8 \
L & 8 & 9 & 11 & 14 & 18 & 23 & 30 & 40 & 55 & 80 & 90
\end{array}$$ Assume that the rental price of capital is $5 and the wage rate of labor is $4. Determine the minimum cost of producing 2,800 units of output and then show how the combination of inputs that yield the minimum cost can be determined using the marginal approach.

A Firm Wants to Minimize the Cost of Producing 2,800