The production function for global electronics is Q=2k^0.5 L^0.5 Assume that the capital stock is fixed at nine units (i.e., K = 9). If the price of output (P) is Rs.6 per unit and the wage rate (w) is Rs.2 per unit, determine the optimal or profit maximizing rate of labor to be hired. What labor rate is optimal if the wage rate increased to Rs.3 per unit?

The production function for global electronics is Q=2k^0.5 L^0.5 Assume that the capital stock is fixed at nine units (i.e., K = 9). If the price of output (P) is Rs.6 per unit and the wage rate (w) is Rs.2 per unit, determine the optimal or profit maximizing rate of labor to be hired. What labor rate is optimal if the wage rate increased to Rs.3 per unit?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter9: Production Functions

Section: Chapter Questions

Problem 9.7P

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