A firm operates in a perfectly competitive output market and a perfectly competitive input market. The production function for the firm is: f(N, K) = NK %3D The price of labour is $10, and price capital $20. If the firm needed to produce 100 units, how much capital and how much labour should they use in the long-run?

Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter11: The Firm: Production And Costs
Section: Chapter Questions
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A firm operates in a perfectly competitive output market and a perfectly competitive input
market.
The production function for the firm is:
f(N, K) = N K
The price of labour is $10, and price capital $20.
If the firm needed to produce 100 units, how much capital and how much labour should they use
in the long-run?
Transcribed Image Text:A firm operates in a perfectly competitive output market and a perfectly competitive input market. The production function for the firm is: f(N, K) = N K The price of labour is $10, and price capital $20. If the firm needed to produce 100 units, how much capital and how much labour should they use in the long-run?
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