1.9. The production function for the personal computers of DISK, Inc., is given by q = 10K0.5L0.5...

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1.9. The production function for the personal computers of DISK, Inc., is given by q = 10K0.5L0.5 where q is the number of computers produced per day, K is hours of machine time, and L is hours of labor input. DISK’s competitor, FLOPPY, Inc., is using the production function q = 10K0.6L0.4

a. If both companies use the same amounts of capital and labor, which will generate more output?

b. Assume that capital is limited to 9 machine hours, but labor is unlimited in supply. In which company is the marginal product of labor greater? Explain.

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Microeconomics

ISBN: 9780132080231

7th Edition

Authors: Robert S. Pindyck, Daniel L. Rubinfeld

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