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1. The government is considering two ways of constructing a public facility. The two ways are almost identical except the use of labor and an
1. The government is considering two ways of constructing a public facility. The two ways are almost identical except the use of labor and an input. The first way uses 80 units of the input and 20 units of labor. The second way uses 60 units of the input and 30 units of labor. The input is traded in a monopoly market. The market demand and production cost of the input are p=2000q and c(q)=100,000+400q, respectively. The market wage is $1,680.
What is the shadow price of each unit of the input if z units are used for a public project.
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