Question: A firm operates with the production function = 20 0.5 0.25 0.4 . The input prices per unit are RM20 for K, RM10 for L

A firm operates with the production function = 20 0.5 0.25 0.4 . The input prices per unit are RM20 for K, RM10 for L and RM5 for R. What is the cheapest way of producing 1,200 units of output?

1 Set up the cost function.(1m)

2 Set up the constraint function. (1m)

3 Set up the Lagrangian equation. (1m)

4 Calculate K, L and R. (10m)

5 What is the minimum cost?(1m)

6 Explain the effect of a 1-unit increase in output. (1m)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

A firm operates with the production function Q = 20K 05 025 04. The input prices per unit are RM20 for K, RM10 for L and RM5 for R. What is the cheapest way of producing 1,200 units of output? (a)...

tax Consider the market for apple juice. In this market, the supply curve is given by QS = 10PJ 5PA and the demand curve is given by QD = 100 15PJ + 10PT , where J denotes apple juice, A denotes...

please help in solving this economic question.......its a complete question * Exercise 5 A housewife buys 2 kilo of meat a week. Assume that the price of the meat increases 60.50 per kilo. Verify: a)...

Question : 34 Price Supply Demand Consumer Surplus Ptariff Producer Surplus Tax Revenue Size of Tariff Societ al Societal LOSS iLoss + - P world Q 51 -Q52 Q c2 Q c1 Quantity Quantity of Imports (with...

To be solved by DKetan. Describe the three methods used to allocate joint costs. What are the advantages/disadvantages of each allocation method? Which method would you recommend? Why? Support your...

MATHEMATICAL EXONOMIC : a firm faces the production function Q = f (K,L) = 80 [ 0,4 k^-0,25 + 0,4 L^-0,25 ] ^ - 1/0,25 , it can buy the inputa K and L at prices per unit 5 and 2 respectively, what...

A government wants to reduce electricity consumption by 10%. The price elasticity of demand for electricity is 0.1. The government must __________ the price of electricity by __________. A. raise; 1%...

Project Planning Appraisal and Control Assignment -A Precision Engineers Ltd. Is considering a proposal to replace one of its machines. The following data is available regarding the same: a. The...

Question 1 (40 marks) Refer to Table 1. Write the Excel formula for each cell marked with "?" in column C such that formula could be copied and pasted into columns D and E using Microsoft Excel...

HI PLEASE ANSWER ALL 1. Assume the market for apples is initially in equilibrium. Which of the following will result in a higher equilibrium price of apples? a. An increase in both the demand for and...

As can be confirmed from information on the Help Screen for a company's Plant Operations Report (see the Plant Investment section), if a company adds new plant capacity at a cost of $40 million, then...

The portion of truss shown represents the upper part of a power transmission line tower. For the given loading, determine the force in each of the members located above HJ. State whether each member...

Read Christensens (1980) critique of Moeller et al. (1980a) and the response of Moeller et al. (1980b) and discuss, including how the issues might play out in an arts/events context.

The selling price of an item is $ 9 9 9 . 9 9 . The expenses are 3 0 % of cost and the profit is 2 3 % of cost . Calculate the following: a . The cost. b . The amount of markup. c . The break - even...

The feeling of boredom.

2. In this chapter, the reader should reflect on the following concepts:

1. To provide an understanding of how emotions are regulated by the development of relationships between actors in a communication situation.