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Suppose That a Firm's Production Function of Output QQ Is a Function of Only Two Inputs, Labor (L) and a Function

Question 38

Multiple Choice

Suppose that a firm's production function of output QQ is a function of only two inputs, labor (L) and capital (K) ( K ) and can be written Q=25LKQ = 25 L K with marginal products MPL=25KM P _ { L } = 25 K and MPK=M P _ { K } = 25L25 L . Letting the wage rate for labor be ww and the rental rate of capital be rr , the equation for the firm's demand for labor would be:


A) L=wQ25rL = \sqrt { \frac { w Q } { 25 r } }
B) L=25rwQL = \sqrt { \frac { 25 r } { w Q } }
C) L=rQ25wL = \sqrt { \frac { r Q } { 25 w } }
D) L=25wrQL = \sqrt { \frac { 25 w } { r Q } }

Correct Answer:

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