New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    Consider the following production function Q =

    20L – 0.2L2 – 20K + 0.2 K2 + 4KL If 20 units of capital is used , what is the upper limit of labor that a rational producer will use?
    A 100 Correct Answer Incorrect Answer
    B 150 Correct Answer Incorrect Answer
    C 200 Correct Answer Incorrect Answer
    D 250 Correct Answer Incorrect Answer

    Solution

    Producer will use labour upto the point where MPL is greater or equal to 0. So, MPL ≥ 0

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