A firm produces according to the following production function: Q = K .25 L .75 . The

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A firm produces according to the following production function: Q = K^.25L^.75. The price of K is $4 per unit, and the price of L is $6 per unit.

a. What is the optimal capital/labor ratio?

b. Derive the amount of capital and labour required to produce 400 units of output. At the given prices what is the total cost of producing 400 units of output?

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Price theory and applications

ISBN: 978-0538746458

8th edition

Authors: Steven E landsburg

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Posted Date: Oct 05, 2022 06:38 AM

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A firm produces according to the following production function: Q = K .25 L .75 . The

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