Question;A manufacturing firm?s production function is Q = KL + K +L. For this production function, MPL = K + 1 and MPK = L + 1. Suppose that the price r of capital services is equal to 1, and let w denote price of the labour services. If the firm is required to produce 5 units of output, for what values of w would a cost-minimizing firm usea) only labour?b) only capital?c) both labour and capital?
Paper#55871 | Written in 18-Jul-2015Price : $19