Problem
The Hormsbury Corporation produces yo-yos at its factory. Both its labor and capital markets are competitive. Wages are $12 per hour, and yo-yo-making equipment (a computer controlled plastic extruding machine) rents for $4 per hour. The production function is q = 40K0.25L0.75, where q = boxes of yo-yos per week, K = hours of yo-yo equipment used, and L = hours of labor. Therefore, MPL = 30K0.25L-0.25and MPK = 10K-0.75L0.75. Determine the cost minimizing capital-labor ratio at this firm.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.