it says that at an output of 100, the firm uses three units of capital (K) and 7 units of labor (L). In 1 capital is $100 per unit per day and labor is $80 per worker per day. So you have 100x 3= $300 and then you have 7x$80=$560. Add those together and at a daily output of 100, the cost for technology one would be $860. See how I did that? Now do that for each technology at each output level.

Question

it says that at an output of 100, the firm uses three units of capital (K) and 7 units of labor (L). In 1 capital is $100 per unit per day and labor is $80 per worker per day. So you have 100x 3= $300 and then you have 7x$80=$560. Add those together and at a daily output of 100, the cost for technology one would be $860. See how I did that? Now do that for each technology at each output level.

Answer 1

To calculate the cost for each technology at each output level, you need to multiply the quantity of capital (K) and labor (L) used by their respective prices per unit. Here's how you can do that:

1. Take the quantity of capital (K) used at the given output level and multiply it by the price per unit of capital. In this case, you mentioned that 3 units of capital are used, and the price per unit is $100. So, the cost of capital at this output level would be 3 * $100 = $300.

2. Next, take the quantity of labor (L) used at the given output level and multiply it by the price per worker. You mentioned that 7 units of labor are used, and the price per worker is $80. So, the cost of labor at this output level would be 7 * $80 = $560.

3. Add the cost of capital and the cost of labor to calculate the total cost at this output level. In this case, it would be $300 + $560 = $860.

So, at an output of 100, using three units of capital and seven units of labor, the cost for technology one would be $860 per day.

To calculate the cost for each technology at each output level, you need to repeat these steps for each technology and input combination, adjusting the quantities and prices accordingly.