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3. (5 marks) Suppose a unit of capital costs $2 and a unit of labour costs $4. The production function is Q = 6KL + 2L².
Posted: Wed Jul 06, 2022 11:45 am
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- 3 5 Marks Suppose A Unit Of Capital Costs 2 And A Unit Of Labour Costs 4 The Production Function Is Q 6kl 2l 1 (17.31 KiB) Viewed 14 times
3. (5 marks) Suppose a unit of capital costs $2 and a unit of labour costs $4. The production function is Q = 6KL + 2L². (a) Using Lagrange multipliers calculate the maximum possible output Q when the total input cost is $200. (b) Measuring labour (L) on X-axis and capital (K) on Y-axis, show the optimal level of L and K in a diagram.