Real-World Applicationshard
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A manufacturing firm operates under the production function Q(K,L)=100K0.6L0.4Q(K, L) = 100 K^{0.6} L^{0.4}. The cost of capital rr is \50perunit,andthecostoflaborper unit, and the cost of laborwisis$20perunit.Givenafixedbudgetper unit. Given a fixed budgetB = $10,000,whatisthecostminimizingratioofcapitaltolabor(, what is the cost-minimizing ratio of capital to labor (K/L$)?