Question: For the production function f (x, y) = 60x 3/4 y 1/4 considered in Example 8, think of f (x, y) as the revenue when

For the production function f (x, y) = 60x3/4y1/4 considered in Example 8, think of f (x, y) as the revenue when x units of labor and y units of capital are used. Under actual operating conditions, say, x = a andy = b, - (a, b) af ax

is referred to as the wage per unit of labor and

is referred to as the wage per unit of capital. Show that

(This equation shows how the revenue is distributed between labor and capital.)

y = b, - (a, b) af ax

Step by Step Solution

3.50 Rating (160 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

fx y 60x34 y14 af 15... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Applied Calculus Questions!