Question

Production function of two companies producing floppy and discs was given.

Q1 = 10L^0.5 K^0.5 Q2 = 10L^0.6K^0.4

Which of the following is correct if both use same amount of capital and labour ?

A Q1 = Q2 Correct Answer Incorrect Answer
B Q1 > Q2 Correct Answer Incorrect Answer
C Q1 < Q2 Correct Answer Incorrect Answer
D All of these Correct Answer Incorrect Answer
E None of these Correct Answer Incorrect Answer

Solution

If K = L, Q1 = Q2 = 10L = 10 K

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