What is the combination that minimize the cost of production

Reference no: EM13197065

Suppose a firms production function is given by Q=L^1/2 * K^1/2
This means that MPl =K^1/2/2L^1/2 and MPk = L^1/2/2K^1/2
Suppose the price of labor is w=36 and price of capital is r=64. Graph the isoquant associated with 12 units of output, and on the same graph, graph the isocost line associate with producing 12 units of output when the firm minimizes the cost of production. Your graph should go up to 36 units on each axis (do not go higher, and identify four combinations of K&L that lie on the isoquant, including the combination that minimizes the cost of production. Be sure graph is labeled accuratley.

Reference no: EM13197065

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