Determine the firms production function for gouda

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The manager of a cheese-packing plant can use either people (labor) or cheese knivess (capital) to prepare packages of gouda. Based on estimates provided by an efficiency expert, the firm's production function for gouda is given by Q = 2K + L (MPK = 2, MPL =1)

a. If the price of labor is $2 per hour and the rental price of capital is $3 per hour, how much capital and labor should be used to minimize the cost of producing 10 units of output?

b. If the price of capital increases to $4 per hour, how does your answer in part a. changes?

Reference no: EM13186585

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