Answered step by step
Verified Expert Solution
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
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started