A firm faces the production function O = 2K2L0 and can buy L at £240 a %3D unit and K at £4 a unit. (a) If it has a budget of £16,000 what combination of K and L should it use to maximize output? (b)...

A firm faces the production function O = 2K2L0 and can buy L at £240 a<br>%3D<br>unit and K at £4 a unit.<br>(a) If it has a budget of £16,000 what combination of K and L should it use<br>to maximize output?<br>(b) If it is given a target output of 40 units of O what combination of K and<br>L should it use to minimize the cost of this output?<br>

Extracted text: A firm faces the production function O = 2K2L0 and can buy L at £240 a %3D unit and K at £4 a unit. (a) If it has a budget of £16,000 what combination of K and L should it use to maximize output? (b) If it is given a target output of 40 units of O what combination of K and L should it use to minimize the cost of this output?

Jun 10, 2022

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A firm faces the production function O = 2K2L0 and can buy L at £240 a %3D unit and K at £4 a unit. (a) If it has a budget of £16,000 what combination of K and L should it use to maximize output? (b)...

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