Question: Answer this question using the method of Lagrangean multipliers. A firm has t he Cobb-Douglas production f unction q (K,W ) = 5W 0,2K0,8 ,

Answer this question using the method of Lagrangean multipliers. A firm has t he Cobb-Douglas production f unction q (K,W ) = 5W 0,2K0,8 , where W i s t he number of workers used, and K is the number of units of capital used. The cost of labour is R20 per worker, and the cost of capital is R40 per unit. The investment budget is R5000 per week. What is the maximum output per week? If the budget is increased by R1 per week, by how much is the weekly output increased? Compare this increase with the value of the Lagrangean multiplier .

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