Consider a firm that employs two inputs, Labour (L) and capital (K), to produce and sell a final good (Q). They produce Q according to the final production function: Q = F(K,L) = (K^0.5)(L^0.5)
This implies the following: MPL = 0.5((K^0.5)/(L^0.5)) ; MPK = 0.5((L^0.5)/(K^0.5))
The market price for the final product Q is $1,000 per unit. The price of capital (pK) is $5 per unit. The price of Labour (pL) is $20 per unit. This firm has no fixed costs.
6. If this firm is cost minimizing, how much Labour must it choose to employ for every single unit of Capital it employs? [3 points]