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Question 5 Melati Plastics Bhd which produces plastic pails has estimated its production function to be as follows: Q=20K0.7 L0.5 Where, Q = rate of output K = capital input L = labour input It currently pays rM200 for each unit of capital and RM20 for each unit of labour. Melati Plastic Bhd currently employs 5 units of capital and 100 units of labour. a) Determine the current output level. b) What should be the optimal combination of capital and labour to produce the present level of output? c) Determine whether the production function exhibit constant, increasing or decreasing returns to scale. d) Determine the % increase in output if both labour and capital are each increased by 15%.