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Questions › DSE › DSE 2012 › Q21
2 marksMicroeconomics › Costs of production › Cost minimisation and long-run input choiceModerateabout 3 min

DSE 2012 Question 21: Costs of production

A firm producing hockey sticks in Punjab has a production function given by Q=2KLQ=2\sqrt{KL}Q=2KL​ where KKK stands for capital, LLL stands for labour and QQQ stands for output. The rental rate of capital is Rs 1 and the wage rate is Rs 4. What will be the firm's cost function?

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Plain-text version

A firm producing hockey sticks in Punjab has a production function given by Q=2√KL where K stands for capital, L stands for labour and Q stands for output. The rental rate of capital is Rs 1 and the wage rate is Rs 4. What will be the firm's cost function? (A) 2Q (B) Q (C) Q² (D) 2Q²

Also written as: A firm producing hockey sticks in Punjab has a production function given by Q=2sqrt(KL) where K stands for capital, L stands for labour and Q stands for output. The rental rate of capital is Rs 1 and the wage rate is Rs 4. What will be the firm's cost function?

Costs of production has come up 83 times in 7 exams since 2006.

What this question tests

This question is on Cost minimisation and long-run input choice, part of Costs of production in Microeconomics.

Choosing inputs to produce a given output at least cost, including across several plants.

TestStop has 22 past-paper questions on this subtopic; the nearest in year are below.

  • GATE 2021 · Q3For the production function Q=F(K,L)=√KL with P_K=4 and P_L=2, find the values of K and L that will minimize…
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Question from the DSE 2012 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.