Question
In economics, Cobb-Douglas functions can be used to model how a company's production amount (P ) depends on the amount of labor involved (L) and
In economics, Cobb-Douglas functions can be used to model how a company's production amount (P ) depends on the amount of labor involved (L) and the amount of capital invested (K). For a particular company, this relationship is P = L2/3K1/3. Suppose the company's current labor force is L = 1000 workers, and the company is currently investing K = $64,000 in capital to produce a particular product. Due to economic difficulty, the company is currently laying off workers at an instantaneous rate of 2 workers per week. If the company would like to keep its production level constant, at what instantaneous rate must it change its capital investment (with respect to time) right now?
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