CLEANIT Inc. produces 900 washing Machines per period using capital (K) and labour (L). This level...

 

Transcribed Image Text:

CLEANIT Inc. produces 900 washing Machines per period using capital (K) and labour (L). This level of production can be achieved with the combinations of the two factors of production (K and L) presented in the end of the question. Assume that the factors of production can be continously substituted for each other. The price of one unit of capital (K) is 80 SEK and the price of one unit of Labour (L) is 40 SEK. a) How should the company combine the production factors to minimize the cost of producing 900 washing Machines? (max. 6 credits) b) What is the lowest cost possible of producing 900 washing Machines in this case? (max. 4 credits) Capial (K) 20 25 30 45 65 Labour (L) 95 60 40 25 20 CLEANIT Inc. produces 900 washing Machines per period using capital (K) and labour (L). This level of production can be achieved with the combinations of the two factors of production (K and L) presented in the end of the question. Assume that the factors of production can be continously substituted for each other. The price of one unit of capital (K) is 80 SEK and the price of one unit of Labour (L) is 40 SEK. a) How should the company combine the production factors to minimize the cost of producing 900 washing Machines? (max. 6 credits) b) What is the lowest cost possible of producing 900 washing Machines in this case? (max. 4 credits) Capial (K) 20 25 30 45 65 Labour (L) 95 60 40 25 20

Answer rating: 100% (QA)

Questiona With 20 units of capital and 95 units of labour tot... View the full answer