A manufacturer has modeled its yearly production function P (the monetary value

Question

A manufacturer has modeled its yearly production function P (the monetary value of its entire production in millions of dollars) as a Cob-Douglas function. F(L, K) = 1.47 L^0.65 K^4.35 where L is the number of labor hours (in thousands) and K is the invested capital (in millions of dollars). Find P(135, 35) and interpret it. (Round your answers to one decimal place.) P(135, 35) = so when the manufacturer invests exist million in capital and thousand hours of labor are completed yearly, the monetary value of the production is about exist million.

Explanation / Answer

P(L, K) = 1.47*L^0.65*K^0.35

we need to find it's value at P(135, 35)

P(135, 35) = 1.47*135^0.65*35^0.35 = 123.725

So,

P(135, 35) = 123.725, So when the manufacturer invests $35 millions in capital and 135 thousand hours of labor are completed yearly, the monetary value of the production is about $123.725 million

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