Question: Suppose a Cobb - Douglas Production function is given by the following: P ( L , K ) = 9 0 L 0 . 9
Suppose a CobbDouglas Production function is given by the following:
where is units of labor, is units of capital, and is total units that can be produced with this
laborcapital combination. Suppose each unit of labor costs $ and each unit of capital costs $
Further suppose a total of $ is available to be invested in labor and capital combined
A How many units of labor and capital should be "purchased" to maximize production subject to your
budgetary constraint?
Units of labor,
Units of capital,
B What is the maximum number of units of production under the given budgetary conditions? Round your
answer to the nearest whole unit.
Max production
units
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