Answer to Question #219697 in Microeconomics for Romeo

Question

1.   We assume a firm's production is determined on two inputs, capital(K) and labour(L).

(a)    Suppose that a firms out put is given by: q = αLK²          

Where α is a productivity factor.

i. Specify the marginal products of labour and capital.

If the cost function is C = wL + rK. Specify the quantites of capital and Labour that minimize costs

Answer 1

The marginal product of a business is the additional output created as a result of additional input placed into the company. The marginal product of labor is the additional output resulting from hiring another worker. For the production function, the marginal product of capital is a constant times the average product of capital.