What is the minimum cost method of producing

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Suppose that a firm’s production function is Q = min{K, L}. Currently, the wage is w = 8 and the cost of capital is r = 8.

A) What is the minimum cost method of producing Q = 40 units of output?

B) Suppose that wages fall to w = 4. Keeping total cost the same, what level of output can be produced and mix of K and L is used?

C) Repeat parts (a) and (b) assuming the production function is Q = K + L..

Reference no: EM13769550

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