Acme container corporation produces egg

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Acme Container Corporation produces egg cartons that are sold to egg dis- tributors. Acme has estimated this production function for its egg carton division:

Q = 25L^0.5K^0.5

where Q = output measured carton lots, L = labor measured in person hours, and K = capital measured in machine hours. Acme currently pays a wage of $10 per hour and considers the relevant rental price for capital to be $40 per hour. Determine the optimal capital-labor ratio that Acme should use in the egg carton division

 

 

Reference no: EM13903109

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