Suppose that a firm's production function is given by the following relationship: Q = 2.5 L 0.5
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Question:
Suppose that a firm's production function is given by the following relationship:
Q = 2.5 L 0.5 K0.5
Where Q = output, L = Labor input, and K = capital input.
1.Determine the percentage increase in output if labor input is increased by 10 percent (assuming that capital input is held constant).
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