Question
consider the following production function Y= K ^(1-alpha)L^(alpha), where Y is production, K is capital, L is labor. Let alpha denote the wage rate and
consider the following production function Y= K ^(1-alpha)L^(alpha), where Y is production, K is capital, L is labor. Let alpha denote the wage rate and r denote the rental rate of capital a. Derive K and L by setting up and solving the profit maximization problem the firm. show every step of all calculations b. what is the expression for rK? Similarly, what the expression for wL?
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Business Statistics for Contemporary Decision Making
Authors: Ken Black
6th Edition
978-0470409015, 9780470559062, 470409010, 470559063, 978-0470910184
