Firm takes two inputs-labor-capital-as perfect substitutes

Assignment Help Business Economics

Reference no: EM13774089

Suppose a firm takes two inputs, labor and capital, as perfect substitutes.

a) In addition, this firm can substitute one labor for one capital. If wage is $2000 and rental rate for capital is $3000, what is the optimal labor and capital usage for this firm if it is to minimize cost?

b) If this firm can substitute two labors for one capital, what is the optimal labor and capital usage for this firm if it is to minimize cost?

Reference no: EM13774089

Questions Cloud

Find the real interest rate for these plans : The Shut-Kan-Do Sheet Metal Company is trying to decide whether it should pay now or pay later for upgrading its production facilities. If the company selected plan A for Action, the necessary equipment would be purchased now for $20,000. Find the re..

What theory or theories might a court use : What theory or theories might a court use to hold Wallace liable for insider trading? Under the Sarbanes-Oxley Act of 2002, who would be required to certify the accuracy of financial statements filed with the SEC?

What are some alternative explanations for observing : What are some alternative explanations for observing among MBA graduates that a greater percentage of men than women reach the highest ranks (e.g., president, CEO) within their firms?

What is the value and effect of a good business : What is the value and effect of a good business impact analysis (BIA). How can using this help an organization develop an effective information security policy

Firm takes two inputs-labor-capital-as perfect substitutes : Suppose a firm takes two inputs, labor and capital, as perfect substitutes. In addition, this firm can substitute one labor for one capital. If wage is $2000 and rental rate for capital is $3000, what is the optimal labor and capital usage for this f..

Briefly discuss the basic elements of these two models : Briefly discuss the basic elements of these two models. Let's not forget that the two competing systems co-exist with each other within the criminal justice system

Super ecstatic about the possibilities and is salivating : Dewey Cheatham is the new Vice President of Marketing for a large online search engine company, Pottstown Innovative Enterprises (AKA, PIE). Dewey has been doing some research into how he can increase the Company’s revenues and thereby really impress..

Technological failures lead to specific changes : What social, cultural, historical or other factors may have contributed to the disaster?

Suppose the monopolist can only charge one price : Suppose a bar has two types of clients: men and women. Suppose the monopolist can only charge one price. What price would he charge? Suppose the monopolist engaged in third degree price discrimination. What prices would he charge?

User Account

All Pages