Suppose firms A and B each make T-shirts. Firm A’s production function is q = L0.5K0.5. Firm B’s production function is q = 1.2 ∗ L0.5K0.5. If the two firms

Suppose firms A and B each make T-shirts. Firm A’s production function is q = L0.5K0.5. Firm B’s production function is q = 1.2 ∗ L0.5K0.5. If the two firms each hire the same amounts of capital and labor, compare the two firms in terms of APL and MPL.

Leave a Reply

Your email address will not be published.