Production function for producing pairs of slippers

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ABC Slippers has the following production function for producing pairs of slippers: q = K L. Its input prices are pK = $80 and pL = $20. It faces a demand curve given by P = 25 – (q/100). a. For q=1024, fill out the following table for combinations of (L,K) that could be used to produce that amount: L K 8 16 32 64 128 Show work for at least one of the calculations. b. Using a piece of graph paper, plot to scale and connect the 5 points from part a along an isoquant. Be sure to label your axes and curve carefully. Please put labor on the horizontal axis and capital on the vertical axis. Also on the graph paper, add at least 3 isocost lines with the appropriate slope. Find the least-cost combination of capital and labor along the isoquant by reaching the lowest possible isocost line. Label the point on your graph. c. Calculate the firm’s total cost of production at the lowest-cost combination of labor and capital found in part b. Show work.

Reference no: EM131092869

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