Ask Question
20 October, 03:26

Consider the following production function: q = 7LK + 5L^2 - (1/3) L^3. Given the following expressions for the marginal productivity of each input: MP_L = 7K + 10L - L^2 and MP_K = 7L Assuming capital is plotted on the vertical axis and labor is plotted on the horizontal axis, determine the value of the marginal rate of technical substitution when K = 30 and L = 15. (Round your answer up to two decimal places and include the proper sign.)

+3
Answers (1)
  1. 20 October, 06:44
    0
    The value of the marginal rate of technical substitution when K = 30 and L = 15 is 1.285

    Explanation:

    MRTS_KL = MP_L/MP_K

    = (7K + 10L - L^2) / 7L

    = (7*30 + 10*15 - (15) ^2) / 7*15

    = 1.285

    Therefore, The value of the marginal rate of technical substitution when K = 30 and L = 15 is 1.285
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Consider the following production function: q = 7LK + 5L^2 - (1/3) L^3. Given the following expressions for the marginal productivity of ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers