A Firm's Production Function Is Given By $Q = K ^ { 2 } L$

question 45

Multiple Choice

A firm's production function is given by $Q = K ^ { 2 } L$ . The marginal products of labor and capital are, respectively, $M P _ { L } = K ^ { 2 }$ and $M P _ { X } = 2 K L$ . Further, the wage rate is $w = \$ 10$ and the rental rate of capital is $r = \$ 20$ . Suppose that the firm spends exactly $1200 in the most efficient way possible. How much output can the firm produce?

• A) 50,000
• B) 56,406.25
• C) 60,750
• D) 64,000

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