Calculate the equal amounts of capital and labor, Managerial Economics

The production function of the personal computers for DISK Company is given by

Q = 10 KL

where Q is the number of computers produced per day, K s the hours of machine time, and L is hours of labor input. Disk's competitor, FLOPPY Company is using the production function

Q = 10 K.6 L.4.

a) If both companies use equal amounts of capital and labor, which will generate more output?

b) Assume that capital is 9 machine hours, but labor is unlimited in supply. In which company is the marginal product of labor the greater? Explain.

 

Posted Date: 4/1/2013 6:15:15 AM | Location : United States







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