A profit maximizing firm produces output using capital, K, and labour, L, in the following production technology: Y = 2*K^0.5*L^0.5 The rental rate of capital is r=0.10. What is the capital-labour ratio of the firm?
A profit maximizing firm produces output using capital, K, and labour, L, in the following production technology: Y = 2*K^0.5*L^0.5 The rental rate of capital is r=0.10. What is the capital-labour ratio of the firm?
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter21: Costs And The Supply Of Goods
Section: Chapter Questions
Problem 13CQ
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A profit maximizing firm produces output using capital, K, and labour, L, in the following production technology:
Y = 2*K^0.5*L^0.5
The rental rate of capital is r=0.10. What is the capital-labour ratio of the firm?
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