Alpha Corporation has two production plants that use labor and capital as inputs. The production function at

Question:

Alpha has two production plants that use labor and capital as inputs. The production function at each plant is

Alpha has 50 workers.
a. Initially the two plants each have 100 units of capital. What is the best assignment of workers to the two plants?
b. Suppose that Alpha installs an additional 300 units of capital at plant 1. How does the best assignment of workers to the two plants change? Why does the increase in capital at plant 1 lead to this change?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...