A firm has a production function (products of the whole year) given by q = 500 LK . Wage is $40,000 per year and capital rental rate is $90,000 per year. (Details and steps required)
a. Find the best way to produce 6000 products in a year. What is the total cost to produce? b. Find the best way to produce 12,000 products in a year. What is the total cost to produce? c. Draw the isoquant curves map and solution point. d. From parts a, b could you find the total cost function? Write down this function. e. Find AC, MC functions.