Answered

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An entrepreneur bought two shoe factories. Shoes produced in each of the factories are identical, and the production function is given by =(K)⁰.⁔, where i denotes the factory, that is, =1,2. The two factories differ in their capital endowment: K1 =25,K2=100. Prices of K and are identical, ==$1.

The entrepreneur wishes to minimize the total costs of production in the short run. How should he divide the production between factories 1 and 2 ?

Sagot :

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