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    Calculating Marginal Productivity of Capital and Labor

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    The production function for the personal computers of DISK Inc. is given by Q= 10 (K *L)^0.5. DISK's competitor FLOPPY Inc's production function is Q = 10K^0.6 L^0.4.
    (a) If K is limited to 9 units, in which company MP of labor greater?
    (b) What can you say about the MP of labor for a given K?

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    Solution Preview

    see the file for the standard display of formulas:

    The production function for the personal computers of DISK Inc. is given by Q= 10 (K *L)^0.5. DISK's competitor FLOPPY Inc's production function is Q = 10K^0.6 L^0.4.
    (a) If K is limited to 9 units, in which company MP of labor greater?
    (b) What can you say about ...

    Solution Summary

    The solution provides detailed explanation of how to compute marginal productivity of labor and capital using specific production functions given in the problem.

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