Question #229772
verify maximum output Q=( L ,K) subjected to c=wl +rk
Expert's answer
If the total output is Q = (L ,K) and total cost is c = wl + rk, then the output Q is maximized, when MPL/w = MPK/k, where MPL and MPK are marginal products of labour and capital respectively.
MPL = Q'(L), MPK = Q'(K).
