The production function for the personal computers of DISK, Inc., is given by q = 10K0.5L0.5, where

Question:

The production function for the personal computers of DISK, Inc., is given by q = 10K0.5L0.5, where q is the number of computers produced per day, K is hours of machine time, and L is hours of labor input. DISK’s competitor, FLOPPY, Inc., is using the production function
q = 10K0.6L0.4.
a) If both companies use the same amounts of capital and labor, which will generate more output?
b) Assume that capital is limited to 9 machine hours, but labor is unlimited in supply. In which company is the marginal product of labor greater? Explain.