Nickel and cobalt are used in electric vehicle (EV) batteries. The production function is below:

q = 5N +4C

The price of nickel is PN = 100 and the price of cobalt is PC = 60. The EV battery firm wants to produce 200 batteries. Draw a graph with cobalt on the upper axis and nickel on the lower axis. Show the isoquant associated with q = 200 and indicate the isoquant equation for that level of output. Now determine how much nickel and cobalt will be used to minimize cost of making 200 batteries. Indicate the isocost line in the graph and show the optimal point. What is the total cost of making 200 batteries?

Answer rating: 100% (QA)

To solve the given problem we will first plot the isoquant associated with the desired output level of 200 batteries Then we will determine the optima... View the full answer