A Firms productino function is as follows...

Question

A firm's production function follows:

Q = min {2L, 3K}

When the price of capital is, r = 6...

If the price of labor is below 4, it should only hire labor (true / false)

Answer 1

False. Hiring only labor means hiring zero capital. For this production function Q = min(2L, 3*0) = 0 for any quantity of labor. Since only labor won't producing anything, it can't be cost minimizing.