How much it will end up costing your company

Reference no: EM133341707

Question: You're the owner of MTR Electrical Estimating. Right now, UNM is asking for electrical service bids for a new building on campus, which requires ?? = 760 electrical fittings. You estimate your company's production function to be

??(??, ??) = ??^0.75 ??^0.25

where ?? is the number of electrical fittings, ?? is labor measured in person hours, and ?? is capital measured in machine hours. Your employees earn $45 per hour and the rental rate is $45 per machine hour. Determined your (i) cost-minimizing level of capital and labor to meet the production requirements and (ii) how much it will end up costing your company.

Reference no: EM133341707

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