A firm has the production function Q = 5LK. Where Q = output, L = amount of labor, and K = the amount of capital.
Suppose the price of labor W = $1 per unit and the price of capital r= $2 per unit. The firm's vice president hires you to figure out what combination of inputs the firm should use to produce 20 units of output. What advice will you give him?
Suppose the price of labor W = $1 per unit and the price of capital r= $2 per unit. The firm's vice president hires you to figure out what combination of inputs the firm should use to produce 20 units of output. What advice will you give him?