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Ronald's Outboard Motor Manufacturing plant production function is q=25K1/2L1/2. Ronald is investigating a new outboard motor manufacturing technique. Ronald believes that if he adopts the
Ronald's Outboard Motor Manufacturing plant production function is q=25K1/2L1/2. Ronald is investigating a new outboard motor manufacturing technique. Ronald believes that if he adopts the new technique, his production function for outboard motors will become q=36K1/2L1/2. A. Given that Ronald uses 4 machine hours, sketch his production function with the old and the new technique as he increases labor hours. B. With the new technique what happens to MP2 and what does this imply for the contribution of labor hours to production? Explain
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