Chapter 8.6, Problem 17P

To determine

(a)

To find:

The modification in the use of labor and capital if the quantity of a production is given by the formula $Q=a{K}^{0.6}{L}^{0.4}$ where a is constant and K represents the capital and L is the notation of labor. The capital input is $\$20$ per unit and the labor cost is $\$10$ per unit. The company is not willing to spend more than $\$150$ combined capital and labor input. 5 units of each labor and capital are to be utilized.

To determine

(b)

To find:

One sentence summery to sell the advice the board of the director if the quantity of a production is given by the formula $Q=a{K}^{0.6}{L}^{0.4}$ where a is constant and K represents the capital and L is the notation of labor. The capital input is $\$20$ per unit and the labor cost is $\$10$ per unit. The company is not willing to spend more than $\$150$ combined capital and labor input. 5 units of each labor and capital are to be utilized.