Price of barley on the rental price of land

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Consider the following information:

Computers:        Sales revenue = Pc*Qc = 150

                                Payments to labor = W*Lc = 75

                                Payments to capital = Rk*K = 75

 

Barley:                      Sales revenue = Pb*Qb = 150

                                Payments to labor = W*Lb = 70

                                Payments to land = Rt*T = 80

Holding the price of computers constant, suppose the percentage increase in the price of barley is 10% and the percentage increase in wage is 5%.

The effect of the increase in the price of barley on the rental price of land is then about?

Reference no: EM131077227

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