Suppose the production function is given by Q = 2K + L.If w = $4 and r = $4, how many units of K and L will be utilized in the production process?
A)All K and no L.
B)All L and no K.
C)Equal amounts of K and L.
D)A combination of K and L no represented above.

Question

Quizplus · Accepted Answer

The production function Q = 2K + L indicates that capital (K) is twice as productive as labor (L). Since the cost of both inputs is the same ($4), it is more efficient to use all K and no L to maximize output.

Suppose the Production Function Is Given by Q = 2K