Question: A firm has the production function f (K, L) = Q = KL - 0. 1K2 - 0. 4L2where Q represents the output, Kis the

A firm has the production function f (K, L) = Q

A firm has the production function f (K, L) = Q = KL - 0. 1K2 - 0. 4L2where Q represents the output, Kis the capital and L is the labor. The prices per unit of Kand L are $40 and $10 respectively. Suppose the firm is interested in maximizing output given a budget constraint of $1000. The optimal values of capital and labor are (a) (L,K)=(10,10) (b) (L, K)=(20, 10) (c) (L, K)=(10,20) (d) (L, K)=(20,20) (e) None of the above

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