Suppose that a firm’s production function of output Q is a function of only two inputs, labor (L) and capital (K) and ca

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answerhappygod
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Suppose that a firm’s production function of output Q is a function of only two inputs, labor (L) and capital (K) and ca

Post by answerhappygod »

Suppose that a firm’s production function of output Q is a
function of only two inputs, labor (L) and capital (K) and can be
written Q = 25LK with marginal products MPL = 25K and MPK = 25L.
Letting the wage rate for labor be w and the rental rate of capital
be r, the equation for the firm’s demand for labor would be:
L=sqrt(wQ/25r)
L=sqrt(25r/wQ)
L=sqrt(rQ/25w)
L=sqrt(25w/rQ)
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