Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Answer this question using the method of Lagrangean multipliers. A firm has t he Cobb-Douglas production f unction q (K,W ) = 5W 0,2K0,8 ,

Answer this question using the method of Lagrangean multipliers. A firm has t he Cobb-Douglas production f unction q (K,W ) = 5W 0,2K0,8 , where W i s t he number of workers used, and K is the number of units of capital used. The cost of labour is R20 per worker, and the cost of capital is R40 per unit. The investment budget is R5000 per week. What is the maximum output per week? If the budget is increased by R1 per week, by how much is the weekly output increased? Compare this increase with the value of the Lagrangean multiplier .

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_2

Step: 3

blur-text-image_3

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 Restaurant From Concept to Operation

Authors: John R Walker

6th Edition

9781118139950, 470626437, 111813995X, 978-0470626436

More Books

Students also viewed these General Management questions

Question

What are the advantages and disadvantages of unit offering bundles?

Answered: 1 week ago