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Production function for a firm is Q =AL K Where Q is output and L and K are the labor and capital inputs respectively and
Production function for a firm is Q =AL K Where Q is output and L and K are the labor and capital inputs respectively and let the price of K=r and the price of L=w a. Show that the production function is homogenous of degree +. b. Determine the relationship between marginal and average products of labor. c. Show that marginal product of labor diminishes as L increases holding K at fixed level. d. Find out the marginal rate of technical substitution of labor for capital (MRTSlk)
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