Suppose That a Firm's Production Function Is Given by Q

question 115

Multiple Choice

Suppose that a firm's production function is given by Q = KL (MP_K = L and MP_L = K) , where Q is quantity of output, K is units of capital, and L is units of labor. The price per unit of labor and capital are $30 and $20, respectively. How many units of labor and capital should the firm use if it wants to minimize the cost of producing 600 units of output?

• A) L = 20; K = 30
• B) L = 30; K = 20
• C) L = 40; K = 60
• D) L = 25; K = 25

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