A firm buys two inputs, labor L and capital K, the total amount of which cannot exceed 100 units. The wage is $8, and the rental rate of capital is $10. The firm can, at most, spend $840 on the two inputs. This data can be summarized in the following equations: Input limit: K + L = 100 Budget limit: 8L + 10K = 840 What are the quantities of two inputs the firm must buy in order to produce a maximum output, given input and budget constraints? K =
A firm buys two inputs, labor L and capital K, the total amount of which cannot exceed 100 units. The wage is $8, and the rental rate of capital is $10. The firm can, at most, spend $840 on the two inputs. This data can be summarized in the following equations: Input limit: K + L = 100 Budget limit: 8L + 10K = 840 What are the quantities of two inputs the firm must buy in order to produce a maximum output, given input and budget constraints? K =
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter7: Production And Cost In The Firm
Section: Chapter Questions
Problem 19PAE
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![A firm buys two inputs, labor L and capital K, the total amount of which cannot exceed 100 units. The wage is $8, and the rental rate of
capital is $10. The firm can, at most, spend $840 on the two inputs.
This data can be summarized in the following equations:
Input limit: K +L = 100
Budget limit: 8L + 10K = 840
What are the quantities of two inputs the firm must buy in order to produce a maximum output, given input and budget constraints?
K =](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcbaaf3a5-97a4-44d4-82b4-c685cbb2fa1a%2F5e58fc77-0a2d-4304-9a84-0a62934b6cbd%2F14andfs_processed.png&w=3840&q=75)
Transcribed Image Text:A firm buys two inputs, labor L and capital K, the total amount of which cannot exceed 100 units. The wage is $8, and the rental rate of
capital is $10. The firm can, at most, spend $840 on the two inputs.
This data can be summarized in the following equations:
Input limit: K +L = 100
Budget limit: 8L + 10K = 840
What are the quantities of two inputs the firm must buy in order to produce a maximum output, given input and budget constraints?
K =
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