Question: Riley's Routers has a production function given by Q = 98LK where Q is the output, L is the labor, and K is the units

Riley's Routers has a production function given by Q = 98LK where Q is the output, L is the labor, and K is the units of capital. The price of labor, P_L, and the price of capital, P_K are

P_L=$30

P_K=$120

a.) What combination of inputs should be used to product 100 units of output?

b.) If the rental price of capital falls by 25%, what happens to output per unit of labor?

c.) Does this production function exhibit increasing returns to scale? Explain.

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