Question: Please assist QUESTION TWO Suppose that you are a rm that produces xylophones. You have a production technology to produce xylophones that can be written

Please assist

Please assist QUESTION TWO Suppose that you are a rm that produces

QUESTION TWO Suppose that you are a rm that produces xylophones. You have a production technology to produce xylophones that can be written as: 1 1 y = HE L! Where K represents the units of capital employed at your production facility. L is the number of labour hours employed and y is your total production of xylophones. Assume that labour costs GH10 per hour and that capital costs GHcZSU per unit. :1} Suppose that you are currently employing 100 units of capital. It" you have expected sales equal to 1.000. Calculate your optimal choice of labour. (3 marks) 1:} Given your answer to (s), calculate your marginal and average cost of production. (6 marks) c) Now. assume that you can adjust your capital as well as labour. Calculate your optimal capitalr'labour choice. [10 marks) ti) Calculate your long run average cost and marginal cost. (6 marks) [Total Marks = 25]

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