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Suppose that a firm's production function of output Q is a function of only two inputs, labour (L) and capital (K) and can be written
Suppose that a firm's production function of output Q is a function of only two inputs, labour (L) and capital (K) and can be written as Q = 3L^0.5K^0.5. Let the wage rate for labour be w = 20, and the rental rate of capital be r = 5. To produce 24units of output at the lowest cost, the firm usesunits of labour andunits of capital.
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