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    Would anyone be able to explain this to me please?

    "The firm has production function f(K,L) = min(K, 2L)"

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    Output is the minimum of K and 2L. Capital and labour need to be increased proportionately to increase production (ration 2:1 for K:L).

    e.g. f(2,1) = f(100,1) = f(2,100) = 2. These varying levels of inputs produce the same output because as from the equation you can see it is the minimum input that is important. This implies that capital and labour work very closely in tandem. One without the other has no impact.
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    (Original post by Speckle)
    Output is the minimum of K and 2L. Capital and labour need to be increased proportionately to increase production (ration 2:1 for K:L).

    e.g. f(2,1) = f(100,1) = f(2,100) = 2. These varying levels of inputs produce the same output because as from the equation you can see it is the minimum input that is important. This implies that capital and labour work very closely in tandem. One without the other has no impact.
    Thank you for your response, that's cleared a lot up. The quote actually comes from a 2500 word essay (below) I've been set which I'm a bit stuck on answering atm. If I'm right the formula signifies perfect complements so I'll speak about that and draw the diagram for that as well as cost function diagram but I'm not too sure what else to talk about. If you have any ideas about things I could include I'd be extremely grateful.

    Thanks

    "Consider a firm that uses labour and capital to produce a single output. The output quantity is q and input quantities are K and L, respectively. Input prices are r and w, respectively. The firm has production function f(K,L) = min(K, 2L). All input quantities are variable. Graphically determine the cost function C(q). Explain the diagram(s). Note that it is not necessary to mathematically determine the formula for C(q)."
 
 
 
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