Find number of units of capital that maximize production

Reference no: EM131801651

Question: Production suppose a company has the Cobb-Douglas production function

z = 300x^2/3y^1/3

where x is the number of units of labor, y is the number of units of capital, and z is the units of production. Suppose labor costs are $50 per unit, capital costs are $50 per unit, and total costs are limited to $75,000.

(a) Find the number of units of labor and the number of units of capital that maximize production.

(b) Find the marginal productivity of money and interpret your result.

Reference no: EM131801651

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