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Hi need help to answer this question - the subject is not listed its Quantitative business analysis Thanks in advance The Cobb-Douglas function for a

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Hi need help to answer this question - the subject is not listed its Quantitative business analysis

Thanks in advance

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The Cobb-Douglas function for a new product is given by Y(K,L) = SRO-41.95 where K is the number of units of capital and L is the number of units of labour required to produce Y(K, L) units of the prouct. B1. In (K, L) space, where capital is on horizontal axis ranging from 0 to 15 and labour is on the vertical axis ranging from 0 to 15, depict all possible combinations of K and L resulting in production levels of 10, 20, 30, 40 and 50 units. [These curves are called isoquants, recall Lecture 5 Slide 6]. In a single graph you should have ve curves (one for each production level). Suppose that each unit of capital costs $20, and each unit of labour costs $15. If $300 has been budgeted for the production of this product, determine how this amount should be allocated in order to maximize production, and nd the maximum production. B2. Write down the Lagrange function. B3. Solve the problem using Lagrange Multipliers (show your work)

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