There are two production plants for producing widgets out of labor and capital. Plant 1's weekly production
Question:
Plant 1's weekly production function is
Plant 2's weekly production function is
There is a total of 100 workers available and 25 units of capital. Suppose that initially plant 1 is using 4 units of capital and 64 units of labor, with plant 2 using the rest.
a. Is there a way to reallocate the inputs to increase the output of both plants?]
b. What allocation of labor and capital would get the most output from plant 2 without changing plant 1's output level?
c. What allocation of labor and capital would maximize the total amount of output that the two plants produce?
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