If the cost of a unit of labor is c₁ and the cost of a unit of capital is c₂, and if the firm can spend only B dollars as its total budget, then production P is constrained by c₁x + c₂ y = B. Show that the maximum production level subject to the constraint occurs at the point

Transcribed Image Text:

x = aB C₁ and y= (1 - α)B C₂