Suppose the technology of a producer is described by the production function 2 ƒ (l, k) = 20l³ k³. If the price of labour is w=$1 and the price of capital is r=$4, what is the 3 2 cost of producing 20 units of output? (Note: for this technology, MPL = 8lk and MPK = 8l ³ ³ k³ ³ ³ .)
Suppose the technology of a producer is described by the production function 2 ƒ (l, k) = 20l³ k³. If the price of labour is w=$1 and the price of capital is r=$4, what is the 3 2 cost of producing 20 units of output? (Note: for this technology, MPL = 8lk and MPK = 8l ³ ³ k³ ³ ³ .)
Chapter6: Proudction Costs
Section: Chapter Questions
Problem 2SQ
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Transcribed Image Text:Suppose the technology of a producer is described by the production function
2
ƒ (l, k) = 20l³ k³. If the price of labour is w=$1 and the price of capital is r=$4, what is the
3
2
cost of producing 20 units of output? (Note: for this technology, MPL = 8lk and
MPK = 8l ³ ³ k³ ³ ³ .)
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