A firm faces the production function Q=6K0.4L0.5 . If it can buy input K at K32 a unit and input L at K8 a unit, what combination of L, and K should it use to maximize production if it is constrained by a fixed budget of K36,000?

A firm faces the production function Q=6K0.4L0.5 . If it can buy input K at K32 a unit and input L at K8 a unit, what combination of L, and K should it use to maximize production if it is constrained by a fixed budget of K36,000?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter16: Labor Markets

Section: Chapter Questions

Problem 16.7P

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A firm faces the production function Q=6K^0.4L^0.5. If it can buy input K at K32 a unit and input L at K8 a unit, what combination of L, and K should it use to maximize production if it is constrained by a fixed budget of K36,000?

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