A Firm Wants to Minimize the Cost of Producing 2,800

Essay

A firm wants to minimize the cost of producing 2,800 units of output per week. It has hired a production engineer to identify alternative production technologies that will accomplish this goal. The production technologies use the different combinations of capital (K) and labor (L) that are listed below.
$$\begin{array} { r r r r r r r r r r r r } K & 200 & 180 & 160 & 140 & 120 & 100 & 80 & 60 & 40 & 20 & 16 \\L & 16 & 18 & 22 & 28 & 36 & 46 & 60 & 80 & 110 & 160 & 180\end{array}$$ Assume that the rental price of capital is $10 and the wage rate of labor is $8. Determine the minimum cost of producing 2,800 units of output.