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11. A firm has a production function of Y $100 Log(K), where K is the amount of capital used in production. The slope of the production function is given by $100/K. Suppose the interest rate is 100%. What is the optimal level of capital? a. $1 b. $20 C. $50 d. $100 e. $200

11. A firm has a production function of Y $100 Log(K), where K is the amount of capital used in production. The slope of the production function is given by $100/K. Suppose the interest rate is 100%. What is the optimal level of capital? a. $1 b. $20 C. $50 d. $100 e. $200

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter7: Production Economics
Section: Chapter Questions
Problem 3E
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11. A firm has a production function of Y = $100 Log(K), where K is the amount of capital used in production. The slope of the production function is given by $100/K. Suppose the interest rate is 100%. What is the optimal level of capital? a. $1 b. $20 C. $50 d. $100 e. $200 ...
Transcribed Image Text:11. A firm has a production function of Y = $100 Log(K), where K is the amount of capital used in production. The slope of the production function is given by $100/K. Suppose the interest rate is 100%. What is the optimal level of capital? a. $1 b. $20 C. $50 d. $100 e. $200 ...
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