Question: a. Suppose the inputs in Problem 3 can be purchased at the same price per unit. Will production be relatively labor intensive or capital intensive?

a. Suppose the inputs in Problem 3 can be purchased at the same price per unit. Will production be relatively labor intensive or capital intensive? Explain.
b. Suppose input prices are PL = 40 and PK = 80 and the price of output is 10. Determine the optimal quantity of each input.

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a The marginal products for labor and capital are given by MP L 10 L and MP ... View full answer

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