A firm produces output with the Cobb‑Douglas function $Q = L^{0.5}K^{0.5}$. The price of labour is ₦20 per unit and the price of capital is ₦80 per unit. To produce $Q = 100$ units at minimum cost, what quantities of labour and capital should be employed and what is the minimum total cost?

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Labour = 200 units, Capital = 50 units, Minimum cost = ₦8,000

Neco Model Questions Vol1 2024 Economics Question 45

A firm produces output with the Cobb‑Douglas function \(Q = L^{0.5}K^{0.5}\). The price of labour is ₦20 per unit and the price of capital is ₦80 per unit. To produce \(Q = 100\) units at minimum cost, what quantities of labour and capital should be employed and what is the minimum total cost?

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