Maria's Umbrellas has a production function given by Q = L0.SKO.5. The wage (W) is $80 per day and the rental per unit of capital (R) is $5 per day. In the long run, how many units of capital will Maria want to buy for each unit of labor?

Maria's Umbrellas has a production function given by Q = L0.SKO.5. The wage (W) is $80 per day and the rental per unit of capital (R) is $5 per day. In the long run, how many units of capital will Maria want to buy for each unit of labor?

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter7: Production And Cost In The Firm

Section: Chapter Questions

Problem 18PAE

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Question

Maria's Umbrellas has a production function given by Q = L0.KO.5. The wage (W) is $80 per day and the rental
per unit of capital (R) is $5 per day. In the long run, how many units of capital will Maria want to buy for each
unit of labor?

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