A Firm's Production Function Is Given By $Q = K L$

question 16

Multiple Choice

A firm's production function is given by $Q = K L$ . The marginal products of labor and capital are, respectively, $M P _ { L } = K$ and $M P _ { K } = L$ . The wage rate of labor is $w = \$ 10$ and the rental rate of capital is $r = \$ 20$ . The firm wants to produce 1,800 units of output in the most efficient way possible. How much does the firm spend?

• A)$2,000
• B)$1,300
• C)$1,200
• D)$1,100

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