Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

2. A plant's production function is Q = 2LK-K 2 , where Q is its output, L is the amount of labour and K is

2. A plant's production function is Q = 2LK-K 2 , where Q is its output, L is the amount of labour

and K is the amount of capital. In the long run, the plant chooses the optimal proportion of labour

and capital. The price of labour is $2 per unit and the price of capital is $1 per unit. In order to

produce 8 units of goods, what are the optimal amounts of K and L?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Great Convergence Information Technology And The New Globalization

Authors: Richard Baldwin

1st Edition

067466048X, 9780674660489

More Books

Students also viewed these Economics questions

Question

e. What age client does the person see?

Answered: 1 week ago

Question

How would you describe Mark Zuckerberg as a team leader?

Answered: 1 week ago