Consider the following production function Q = 16L 0.75 K 0.25 If the rental price of capital
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Question:
Consider the following production function
Q = 16L0.75K0.25
If the rental price of capital and wage rate for labor is 20 birr and 10 birr respectively, then determine the following question when the firm allocates a total cost of birr 800.
- Calculate optimal unit of labor and capital that would maximize total output.
- Calculate the maximum output
- Show the equilibrium condition graphically
- Check the above production function for returns to scale
Related Book For
Organizations Behavior, Structure, Processes
ISBN: 978-0078112669
14th Edition
Authors: Gibson, Ivancevich, Donnelly, Konopaske
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