Consider the optimization problem of maximizing Cobb–Douglas production function: Q = 20 K1/2 L1/2, subject to cost constraint:

Question

3 years ago

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Consider the optimization problem of maximizing Cobb–Douglas production function: Q = 20 K1/2 L1/2, subject to cost constraint:

K + 4L = 64.
a/ Use the method of Lagrange multipliers to find the maximum value of the production function;
b/ Estimate the change in the optimal value of Q if the cost constraint is changed to K + 4L = 65, and state the new maximum value of the production function.

Mathematics

1 answer:

chubhunter [2.5K] · Answer 1 · 2022-02-23T20:47:14+03:00

chubhunter [2.5K]3 years ago

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Answer:

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