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Suppose the price of labor is $8.00 and the price of capital is $2.00. If a...

Suppose the price of labor is $8.00 and the price of capital is $2.00. If a firm’s production function is Y = 20*L4/5*K1/5, in what proportion should they be using capital versus labor?

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c=whtak=82+2k. The wage of labor (w) is $8 and the rent of the capital (o) is st2. Using Langrange Maximize YCK, L) with resp26 *K- 4 20 20 4 LS KVS 8 L =1 L=k Labor and substitutable the production would capital are perfectly commodities / inpute in

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