Hey guys, is anyone able to help me with this question?
Use Lagrange Multipliers to find expressions for K and L which maximize output given by the production function:
(A,a,b are positive constants)
subject to a cost constraint
Hey guys, is anyone able to help me with this question?
Use Lagrange Multipliers to find expressions for K and L which maximize output given by the production function:
(A,a,b are positive constants)
subject to a cost constraint
Are we to assume that , , and M are constant also? If so,
Let [/tex]F(K, L)= AK^aL^b[/tex] and .
The max and/or min occure when for some number . Take the gradients of F and G, put them into that equation, write the equations given by the two components, and find all values K and L that satisfy it. (You do not need to find . I find that dividing one equation by another is a good strategy since it eliminates and don't for get that is another equation of K and L.)