An electronics plant's production function is Q = 5LK, where Q is its output rate, L is
Question:
a. What advice would you give him?
b. Suppose the price of labor increases to $2 per unit. What effect will this have on output per unit of labor?
c. Is this plant subject to decreasing returns to scale? Why or why not?
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Related Book For
Managerial Economics Theory Applications and Cases
ISBN: 978-0393912777
8th edition
Authors: Bruce Allen, Keith Weigelt, Neil A. Doherty, Edwin Mansfield
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