Suppose firms A and B each make T-shirts. Firm A's production function is  q = L0.5 K0.5. Firm B's production function is q = 1.2* L0.5 K0.5. If the two firms each hire the same amounts of capital and labor, compare the two firms in terms of APL and MPL.

Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter12: The Supply Of And Demand For Productive Resources
Section: Chapter Questions
Problem 12CQ
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Suppose firms A and B each make T-shirts. Firm A's production function is  q = L0.5 K0.5. Firm B's production function is q = 1.2* L0.5 K0.5. If the two firms each hire the same amounts of capital and labor, compare the two firms in terms of APL and MPL.

 

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