Jordan Inc makes basketballs in Vietnam using labor (L) and capital (K). Its weekly production function can be described as:
Q = 5 * K1/2 * L1/2
The price of each unit of capital is $40 per unit per week. The labor use varies according to the number of basketballs made, and each worker employed is paid a weekly wage of $25.
a) Short run: Suppose K = 25 units per week in the short run. Compute the weekly TC and the MC functions for Jordan Inc.
b) Suppose you consider the following long run problem: That Jordan Inc expects to sell 2000 basketballs per week. You, the consultant, has been asked to determine the number of units of labor and capital the company should deploy, so it can minimize the cost of making the 2000 basketballs. What would you suggest? Show relevant computations.