Question

Given a cobb – Douglas production function

Q = L0.5 K0.4

And the prices of capital and labour are ksh3 and ksh 4 respectively while the firm outlay is Kshs.108, calculate the optimal combination of factors inputs.

Answer 1

Simplify y

`l {}^(0.) (0.5 \: ko).0.4`

The Answer is:

`q = 0.2ko`