Which process is now economically efficient-alpha or beta

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Process alpha / process beta labour 625/ 250 capital ... Question process alpha / process beta labour 625/ 250 capital 45/125 A firm plans to produce 500 units per day of good Z. The firm’s production engineer finds two technically efficient processes (i.e., input combinations of labor and capital) to produce 500 units per day: a. If the production function for the existing technology is , where Q is the maximum possible output, L is the amount of labor used, and K is the amount of capital used, then f (625, 45) = __________ and f (250, 125) = __________. b. If the firm must pay $350 per day for a unit of labor and $1,500 per day for a unit of capital, which process is economically efficient, Alpha or Beta? c. If the price of labor falls to $300 per day for a unit of labor and the price of capital remains $1,500 per day, which process is now economically efficient, Alpha or Beta? d. Holding the price of capital constant at $1,500 per unit, Process Alpha will never be economically efficient if a unit of labor costs __________ (less, more) than $________ per day

Reference no: EM131086077

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