3. The Chipper Cookie Company's output is given by the Cobb-DouglasProduction function P = 120L0.7 K0.3, where P is the number of unitsproduced when Lis the amount spent on labor and K is the amount spenton capital.a. What is the production if L = 600 and K = 600?b. Find the marginal productivities.c. Evaluate the marginal productivities with L= 600 and K = 600.d. Interpret the meanings of the marginal productivities found in part c.e. If their budget is $1200 then there is a constraint L+ K = 1200. UseLagrange multipliers (^) to find the values of L and K that willmaximize production and find the maximum productionf. Find and interpret 2 for this problem.only need parte and f!

Total cost equation - L + K = 1200 ℒ= (120L0.7 K0.3)+λ (1200-L-K)∂ℒ∂L= 84L-0.3K0.3-λ=0…

e. If their budget is $1200 then there is a constraint L+ K = 1200. Use Lagrange multipliers (2) to find the values ofL and K that will maximize production and find the maximum production f. Find and interpret 2 for this problem.

e. If their budget is $1200 then there is a constraint L+ K = 1200. Use Lagrange multipliers (2) to find the values ofL and K that will maximize production and find the maximum production f. Find and interpret 2 for this problem.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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