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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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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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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 ...

Purchase this Solution


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