Acme container corporation produces egg cartons that are


Acme Container Corporation produces egg cartons that are sold to egg distributors. Acme has estimated this production function for its egg carton division:

Q = 25L^0.6 K^0.4

where Q = output measured in one thousand carton lots,

L = labor measured in person hours, and

K = capital measured in machine hours.

Acme currently pays a wage of $10 per hour and considers the relevant rental price for capital to be $25 per hour. Determine the optimal capital-labor ratio that Acme should use in the egg carton division.

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Business Economics: Acme container corporation produces egg cartons that are
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