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

question 59

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 $r = \$ 20$ . What is the most efficient combination of labor and capital $( L , K )$ that also yields a cost of exactly $\$ 1000$ ?

• A) \(( 10,45 )\)
• B) \(( 25,50 )\)
• C) \(( 50,25 )\)
• D) \(( 20,40 )\)

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