Suppose a company has the Cobb-Douglas production function z = 300x 2/ 3 y 1/3 where x
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Suppose a company has the Cobb-Douglas production function z = 300x2/3y1/3 where x is the number of units of labor, y is the number of units of capital, and z is the units of production. Suppose labor costs are $50 per unit, capital costs are $50 per unit, and total costs are limited to $75,000.
(a) Find the number of units of labor and the number of units of capital that maximize production.
(b) Find the marginal productivity of money and interpret your result.
(c) Graph the constraint with the production function when z = 180,000, z = 300,000, and when the z-value is optimal.
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a The objective function is Production ...View the full answer
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Related Book For
Mathematical Applications For The Management, Life And Social Sciences
ISBN: 9781337625340
12th Edition
Authors: Ronald J. Harshbarger, James J. Reynolds
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