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You have a small business that uses machines (K) and labour (L) to produce output (Q). You need two workers for every machine, so your production function is Q = min{L,2K}. You have to pay w = 25 for every unit of labour and r = 400 for every machine. You need to produce 6,000 units of output Q.
(a) Write down the long-run "producer's problem" define the objective, any con- straints and what is being chosen to achieve the objective.
(b) What quantities of Labour and Captial are demanded?
(c) What is minimized total cost?
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market researchers at chrysler estimated the demand for their new chrysler crossfire sports cars as followsqc 1050000
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