A Cobb-Douglas production function for new company is given by F(K,L) = K3/5L2/5 where K represents the units of capital and L represents the units of labor. Suppose units of labor and capital cost $200 and $100 each respectively. If the budget constraint is $30,000, find the maximum production level for this company.

A Cobb-Douglas production function for new company is given by F(K,L) = K3/5L2/5 where K represents the units of capital and L represents the units of labor. Suppose units of labor and capital cost $200 and $100 each respectively. If the budget constraint is $30,000, find the maximum production level for this company.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter9: Production Functions

Section: Chapter Questions

Problem 9.7P

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