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1.A firm's production function is Q = L 1/2 K 1/2 . They have 16 units of capital (which is fixed in the short-run). The
1.A firm's production function is Q = L1/2 K1/2 . They have 16 units of capital (which is fixed in the short-run). The unit cost of labour is 2 and the unit cost of capital is 4. They receive an order of 4.
a)Use the Lagrangian method to calculate the optimal choice of inputs used to fulfil the order in the long-run.
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