If Output Is Produced According to Q =4L +6K, the Price

question 66

Multiple Choice

If output is produced according to Q =4L +6K, the price of K is $24, and the price of L is $20, then the cost-minimizing combination of K and L capable of producing 72 units of output is

• A)L = 9 and K = 6.
• B)L = 20 and K = 24.
• C)L = 18 and K = 12.
• D)L = 0 and K = 12.
• E)L = 18 and K = 0.

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Definitions:

Inventory Turnover Rate

A ratio showing how many times a company's inventory is sold and replaced over a period.

Cost of Goods Sold

The expenses directly linked to the manufacturing of products a company sells, which consist of materials and labor.

Sales

The process of exchanging products or services for money, constituting the primary revenue stream for most businesses.

Accounts Receivable

Accounts Receivable represents the money owed to a company by its customers for goods or services that have been delivered but not yet paid for.