Question

A firm produces output according to a production function:

Q = F(K,L) = min {6K,6L}.

If the wage rate is $35 per hour and the rental rate on capital is $25 per hour, what is the cost-minimizing input mix for producing 12 units of output?

Capital___________

Labor____________

B. How does your answer to part b change if the wage rate decreases to $25 per hour but the rental rate on capital remains at $25 per hour?

	Capital and labor increase.
	Capital decreases and labor increases.
	Capital increases and labor decreases.
	It does not change.