Karol has a coffee shop and produces coffee drinks under theproduction function Q = F(K,L) = 5K + L

August 14, 2021/in Uncategorized /by Paul Wright

Karol has a coffee shop and produces coffee drinks under theproduction function Q = F(K,L) = 5K + L , where q is the number of cups generatedper hour, K is the number of coffee machines (capital), and L isthe number of employees hired per hour (labor). Suppose Karol needsto produce 500 cups of coffee and the price of capital is 40 europer unit and the price of labor (wage) is 20 euro per unit. IfKarol minimizes costs, how much capital and how much labor shouldhe employ? . . .

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Karol has a coffee shop and produces coffee drinks under theproduction function Q = F(K,L) = 5K + L

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