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A firm produces output

/in /by

A firm produces output according to a production function:

Q = F(K,L) = min {5K,5L}.

a. How much output is produced when K = 2 and L = 3?




b. If the wage rate is $50 per hour and the rental rate on capital is $30 per hour, what is the cost-minimizing input mix for producing 10 units of output?

Capital: 
Labor: 


c. How does your answer to part b change if the wage rate decreases to $30 per hour but the rental rate on capital remains at $30 per hour?

Capital increases and labor decreases.
Capital and labor increase.
Capital decreases and labor increases.
It does not change.

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