Purchase Solution

Lagrangian function

Not what you're looking for?

Ask Custom Question

The user capital in fact is 3% and not 3$. I don't know...3% of what? Please provide me with detailed step-by-step solutions thanks.

A firm wants to minimize cost subject to its production function. Its labor cost is 10$ per person-hours and the user cost of capital is 3%. The firm wants to produce 50 units of output with the following production function 2K0.5L0.5. Use the Lagrangian function to derive how many units of capital and labor the firm should use in order to minimize costs.

See attached file for full problem description.

Attachments
Purchase this Solution

Solution Summary

This posting uses the Lagrangian function to derive how many units of capital and labor the firm should use in order to minimize costs.

Purchase this Solution


Free BrainMass Quizzes
Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.