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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 60

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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 } = 25L. Let the wage rate for labor be w=1w = 1 and the rental rate of capital be r=1r = 1 . If the firm produces 100 units of output, how many units of labor will it use?


A) 1
B) 2
C) 3
D) 4

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