Suppose an automobile manufacturer has a fixed proportions production function that requires it always uses 2 workers and 1 machine to produce 1 car belt. If the wage rate w = $10 and rental rate are r = $15.
What is the cost-minimizing combination of L and K to produce 50 units of output. How much is the minimum cost?
What is the cost-minimizing combination of L and K to produce 100 units of output. How much is the minimum cost?