Meyer inc produces lampposts using labor (l) and capital (k). its production function is given by the following expression: q =min{ 118 l , 186 k} where q is the output of lampposts. the prices of labor (pl), capital (pk), lamppost (p) and the cost (c) are the following: pl=16, pk=11, p=15 and c=5,889 what is the profit maximizing amount of labor that meyer inc should hire?

L = 0

K = 535.36

Q = 99,577 units

Explanation:

Q = 118L + 186K  

Budget line: C = L.PL + K.PK

5,889 = 16L + 11K

This is a linear production function, indicating labor and capital are perfect substitutes. Optimal bundle lies on one of the corner points on isoquant.

From budget line,

When L = 0, K = 5,889/11 = 535.36  

Q = 118*0 + 186*535.36 = 0 + 99,576. 96 = 99,577 units

When K = 0, L = 5,889 / 16 = 368.06

Q = 118*368.06 + 11*0 = 45,555.08 + 0 = 45,555 units

So, output is maximized when L = 0 and K = 535.36, since Q = 99,577 units (optimal labor).

Hope this helps!

d. low interest rates

answercombination of ability and experience of the partners;