Question: A firm operates with the production function Q = 20K 05 025 04. The input prices per unit are RM20 for K, RM10 for L

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) Set up the cost function. (b) Set up the constraint function. (c) Set up the Lagrangian equation. (d) Calculate K, L and R. (e) What is the minimum cost? (f) Explain the effect of a 1-unit increase in output

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