For the production function f (x, y) = 60x^3/4y^1/4 considered in Example 8, think of f (x, y) as the revenue when x units of labor and y units of capital are used. Under actual operating conditions, say, x = a and

is referred to as the wage per unit of labor and

is referred to as the wage per unit of capital. Show that

(This equation shows how the revenue is distributed between labor and capital.)

Transcribed Image Text:

y = b, - (a, b) af ax