A firm has two plants that operate with capital and labor as inputs. The first plant has
Question:
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The second plant has the production function
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where A> 0 is a technological parameter.
a. What are the marginal products of capital and has labor in each of the plants as a function of the amount of labor and capital being used in the plant?
b. Suppose the firm has 100 units of capital and hired 50 units of labor. What is the allocation of capital and labor among the two plants that maximizes total output? (Your answer should be in terms of A.)
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a The marginal product of labor in plant 1 is K The marginal product of capital in plant 1 is L The ...View the full answer
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