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 spends exactly $1000 in the most efficient way possible. How much output can the firm produce?
A) 450
B) 800
C) 1000
D) 1250
Correct Answer:
Verified
Correct Answer:
Verified
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