The Production Function for a Company Is , Where

Multiple Choice

The production function for a company is , where P is the amount produced given x units of labor and y units of equipment. Each unit of labor costs $900 and each unit of equipment costs $400. Assuming the goal of the company is to maximize production given a fixed budget of $40,000, what is the meaning of the Lagrange multiplier ?

A) The additional units that can be produced if the budget is increased by $1
B) The amount it would cost the company to produce one more unit
C) The additional units of labor allowed if the budget is increased by $1
D) The amount it would cost the company to obtain one additional unit of equipment