A Firm's Production Function Is Given by Q = KL $( L , K )$

question 74

Multiple Choice

A firm's production function is given by Q = KL. The marginal products of labor and capital are, respectively, MPL = K and MPK = L. The wage rate of labor is w = $10 and the rental rate of capital is r = $20. The firm wants to produce 1,800 units of output. What is the most efficient combination of labor and capital $( L , K )$ ?

• A)(10, 20)
• B)(20, 90)
• C)(60, 30)
• D)(90, 20)

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