A firm produces output according to a production function

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A firm produces output according to a production function: Q = F(K,L) = min {3K,6L}.

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

b. If the wage rate is $55 per hour and the rental rate on capital is $45 per hour, what is the cost-minimizing input mix for producing 6 units of output? Capital___ Labor____

c. How does your answer to part b change if the wage rate decreases to $45 per hour but the rental rate on capital remains at $45 per hour?

- Capital decreases and labor increases

-Capital increases and labor decreases

-Capital and labor increase

-It does not change.

Reference no: EM13997152

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