Question: QUESTION ECONOMICS 'u -r.r} 9 J.' 4. An efficient small firm has a production function q[k;i] = ici'i'i'. where is denotes the number of capital

QUESTION ECONOMICS

'u \\-r.r} 9 J.' 4. An efficient small firm has a production function q[k;i] = ici'i'i'. where is denotes the number of capital units used. and i the number of labour units used. The unit costs for capital and labour are 32 and 2 respectively. The upper limit on the firm's production level is 10. Use the method of Lagrangean multipliers to determine the firm's cost function C(q}. Hint: Since the firm is efficient we want to minimize the cost of labour and capital for a fixed output {1

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