You have just been hired as the production manager of a Krispy Kreme donut shop. You produce donuts using labour and capital with a production function given by f(L,K)= L^1/3K^1/3. The rental rate of your donut machines is 16 and workers cost 2. Right now you are under contract to hire 27 workers regardless of the number of donuts you produce. How much capital should you rent to produce 3 doughnuts?
9 doughnuts?

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The Answer of You have just been hired as the production manager of a Krispy Kreme donut shop. You produce donuts using labour and capital with a production function given by f(L,K)= L^1/3K^1/3. The rental rate of your donut machines is 16 and workers cost 2. Right now you are under contract to hire 27 workers regardless of the number of donuts you produce. How much capital should you rent to produce 3 doughnuts? 9 doughnuts?

You Have Just Been Hired as the Production Manager of a Krispy