Question

Suppose Q = 0.58KL, marginal product of labor = 0.58K, and marginal product of capital =...

Suppose Q = 0.58KL, marginal product of labor = 0.58K, and marginal product of capital = 0.58L. The firm has $100 to spend on labor (wage = $10) and capital (price of capital, r = $10). What is the optimal input mix of labor and capital?

A)

L = 5, K= 5

B)

L = 10, K = 10

C)

none of the answers are correct.

D)

L = 5.8, K = 5.8

Homework Answers

Answer #1

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