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A Firm's Production Function Is Given by Q = KL

Question 9

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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.What is the most efficient combination of labor and capital A firm's production function is given by Q = KL.The marginal products of labor and capital are,respectively,MP<sub>L</sub> = K and MP<sub>K</sub> = L.The wage rate of labor is w = $10 and the rental rate of capital is r = $20.What is the most efficient combination of labor and capital that also yields a cost of exactly $1000? A) (10, 45) B) (25, 50) C) (50, 25) D) (20, 40) that also yields a cost of exactly $1000?


A) (10, 45)
B) (25, 50)
C) (50, 25)
D) (20, 40)

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