Given production function f(x,y)= min(ax,by) where a, b are positive and the product sells at p, the inputs costs are w and u respectively
a. If the full capacity for this producer is j units, how would the owner organize the manufacturing at the full production level? And what is the cost function written in terms of output level j?
b. If the full capacity is infinite, how would the owner organize the production, and what is the output level? And the profit?
c. What if production is instead f(x,y)= ax + by, repeat part a.