Operating in a high-wage country


A firm can use three different production technologies, with capital and labor requirements at each level of output as follows:

Technology 1 Technology 2 Technology 3

Daily Output K L K L K L

100 3 7 4 5 5 4

150 3 10 4 7 5 5

200 4 11 5 8 6 6

250 5 13 6 10 7 8

a. Suppose the firm is operating in a high-wage country, where capital cost is $100 per unit per day and labor cost is $80 per worker per day. For each level of output, which technology is cheapest?

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Macroeconomics: Operating in a high-wage country
Reference No:- TGS065100

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