# Economics

posted by .

The chapter is on Production and costs in thelong run, we are given a long run expansion path graph, all through out the book we are given labor cost and capital cost, ie. price of labor \$5 dollars per unit(w), price of capital \$10 per unit (r). Then I get the following question:
The production engineers at Impact Industries have derived an expansion path (graph shown but I can't re-produce) the price of labor per unit is \$100 per unit. The question is what price does Impact Industries pay for capital?
I'm lost because we've always been given the per unit of capital....am I going about this wrong? How do I find the capital price?!?!?!?!?
Output Labor Capital (K) (w = \$5) (r=???)
120 4 20
180 6 30
240 8 50
Thanks,
EY

I don't believe you have provided enough information to solve. I suspect, perhaps, you are missing values for the marginal product of labor and the marginal product of capital?

## Similar Questions

1. ### Expansion Path Economics

I've been trying to find a solution to this without much success. I am given the following....The production engineers at Impact Industries have derived the expansion path shown in the following figure. The price of labor is \$100 per …
2. ### Managerial Economics

I've been trying to find a solution to this without much success. I am given the following....The production engineers at Impact Industries have derived the expansion path shown in the following figure. The price of labor is \$100 per …
3. ### economics

suppose a firm's constant-returns to scale production function requires it to use capital and labor in a fixed ratio of two workers per machine to produce 10 units and that the rental rates for capital and labor are given by v=1, w=3. …
4. ### Economics

Consider the production function Q = 20K 1/2 L 1/2. The firm operates in the short run with 100 units of capital. a. The firmâ€™s short-run production function is Q = __________. c. The average product of labor function is AP = __________. …
5. ### Economics

There is a graph showing the expansion path and three curves at 120, 180, 240 output levels.The expansion path hits these lines at(120) 20 (C)(capital units) 4(L)(Labor units, (180) 40 (C) 6(L), (240) 50(C) 8(L). There are three straight …
6. ### Economics

The production engineers at Impact industries have derived the expansion path shown in the following figure. The price of labor is \$100 per unit. a. What prices does an impact industry pay for capital?
7. ### Economics

the price of labor is \$100 per unit and the price of capital is \$20 per unit. What will the long-run total cost and long-run average cost of producing 120 units?
8. ### Economics

2. (i) The production function for a firm is given by Q = LK where Q denotes output; Land K labor and capital inputs. Wage rate and rental rate are given by w and r respectively. (a) Show whether or not the above production function …
9. ### Math/Economics

Suppose that a firm has only one variable input, labor, and firm output is zero when labor is zero. When the firm hires 6 workers it produces 90 units of output. Fixed cost of production are \$6 and the variable cost per unit of labor …
10. ### Math/Economics

Suppose that a firm has only one variable input, labor, and firm output is zero when labor is zero. When the firm hires 6 workers it produces 90 units of output. Fixed cost of production are \$6 and the variable cost per unit of labor …

More Similar Questions