Units of capital K 150 100 75 50 25 4 09 25 q 1001 9 200 50

Last updated: 4/5/2023

Units of capital K 150 100 75 50 25 4 09 25 q 1001 9 200 50 75 Units of labor L The above graph shows a firm s isoquants and isocost curves 9 300 100 150 1 Assume that the price per unit of capital r is 4 and the price per unit of labor w is 4 as well What is the total minimum cost of producing 200 units 2 What condition has to be fulfilled for the firm to produce with a cost minimizing combination of capital and labor Please circle all correct answers a The marginal product of labor MPL has to be equal to zero b The marginal product of capital MPK should be equal to the marginal product of labor MPL c The marginal rate of technical substitution w r d MPL w MPK r