Question #229772
verify maximum output Q=( L ,K) subjected to c=wl +rk
1
Expert's answer
2021-08-26T10:05:15-0400

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).


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