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A bike manufacturer has a production function represented by ð‘„=2K+L.
a. Graph the isoquants for Q = 2, Q = 4, and Q = 6 on the same axis.
b. If the wage rate w is $1 and the rental rate on capital is r = $1, illustrate what cost-minimizing combination of K and L will the manufacturer employ for the output levels in part a?
c. How, if at all, would your answer to part b change if r is increased to $3, while w remains at $1?
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