Suppose a companys monthly production value Q in thousands of dollars is given by the Cobb-Douglas production
Question:
Suppose a company’s monthly production value Q in thousands of dollars is given by the Cobb-Douglas production function
Q = 10K0.45L0.55
where K is thousands of dollars of capital investment per month and L is the total hours of labor per month. Capital investment is currently $10,000 per month, and monthly work-hours of labor total 1590.
(a) Find the monthly production value (to the nearest thousand dollars).
(b) Find the marginal productivity with respect to capital investment and interpret your result.
(c) Find the marginal productivity with respect to total hours of labor and interpret your result.
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Q 10K 045 L 055 k 10 L 1590 a Q 1010 045 1590 055 1625 thousand b If labo...View the full answer
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Related Book For 
Mathematical Applications For The Management, Life And Social Sciences
ISBN: 9781337625340
12th Edition
Authors: Ronald J. Harshbarger, James J. Reynolds
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