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A Firm's Production Function Is Given by Q = KL (L,K)( L , K )

Question 74

Multiple Choice

A firm's production function is given by Q = KL. The marginal products of labor and capital are, respectively, MPL = K and MPK = L. The wage rate of labor is w = $10 and the rental rate of capital is r = $20. The firm wants to produce 1,800 units of output. What is the most efficient combination of labor and capital (L,K) ( L , K ) ?


A) (10, 20)
B) (20, 90)
C) (60, 30)
D) (90, 20)

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