Two garments factories produce output according to the same production function q=k4 where qis output, kis capital and lis labour. However, Factory 1 uses
Two garments factories produce output according to the same production function q=k4 where qis output, kis capital and lis labour. However, Factory 1 uses more labour than Factory 2 so that = 1600 and 1=1000. The total amount of capital (i.e. the number of machines) available is 200. Find (a) The outputs of each of the two factories in terms of capital. (b)The outputs of each of the two factories if the available capital is divided equally between them. (c) The outputs of each of the two factories if the available capital is divided efficiently between them.
Step by Step Solution
3.41 Rating (157 Votes )
There are 3 Steps involved in it
Step: 1
ANSWER A6...See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started