1. A company that produces exercise bikes has the following production function:

Q= 2.5L^0.74K^0.28

where K measures the capital they use in thousands of square feet, and L measures labor in worker-hours.

A. What is the marginal product of labor? What is the marginal product of capital?

B. What kind of returns to scale does this production function exhibit?

C. Suppose the company decides to build a 50,000 square foot plant. They produce their exercise bikes in a country where the average wage per hour is $100. They sell the finished exercise bike for $550. At that plant size, what is the optimal amount of labor-hours they should use? (Note: when solving this question, it is fine to leave your answer with L and its exponents isolated on one side if you are not familiar with how to deal with the decimal exponents.)