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Imagine that a firm can use labor (L) or capital (K) to produce rocking chairs (Q) with the following production function Q=5L+2K. The wage (w)

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Imagine that a firm can use labor (L) or capital (K) to produce rocking chairs (Q) with the following production function Q=5L+2K. The wage (w) is $10 and the rate of capital (r) is $20. The target number of rocking chairs to produce is 40. Choose the optimal values for L* and K* in the long run. 8 v 0 v

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