1. Rikell company produces helmets using labor (L) and capital (K). Its production function is given...
1.
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Rikell company produces helmets using labor (L) and capital (K). Its production function is given by the following expression: Q = 98 L + 5 K where Q is the output of helmets. The prices of labor (PL), capital (PK), helmet (P) and the cost (C) are the following: PL=70, PK=62, P=48 and C=2,856 What is the slope of Rikell's Isoquant? 2.
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Homework Answers
1. Slope of the isoquant = -MRTS
MRTS = Marginal product of labor/Marginal product of capital =
So, slope of isoquant = -19.6
2. Slope of the isocost = -PL/PK = -10/25 = -0.4
So, slope of the isocost is -0.4
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Rikell company produces helmets using labor (L) and capital (K).
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