Find the amount of capital (K) and labour (L) that should be employed to maximize output (q) given the following Cobb-Douglas production functions and constraints set by Pk, PL and budget B: q(K,L) = K°ªL°6 Pg = 8,P, = 6,B = 300

Linear Algebra: A Modern Introduction
4th Edition
ISBN:9781285463247
Author:David Poole
Publisher:David Poole
Chapter2: Systems Of Linear Equations
Section2.4: Applications
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Find the amount of capital (K) and labour (L) that should be employed to maximize
output (q) given the following Cobb-Douglas production functions and constraints
set by Pk, PL and budget B:
q(K,L) = K°ªL°6
PK = 8, P, = 6, B = 300
(You MUST justify that the stationary point you found does indeed maximize
the given function).
Transcribed Image Text:Find the amount of capital (K) and labour (L) that should be employed to maximize output (q) given the following Cobb-Douglas production functions and constraints set by Pk, PL and budget B: q(K,L) = K°ªL°6 PK = 8, P, = 6, B = 300 (You MUST justify that the stationary point you found does indeed maximize the given function).
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