Problem
A plant's production function is Q = 2KL+ K. For this production function, MPK = 2L +1 and MPL = 2K. The price of labor services w is $4 and of capital services r is $5 per unit.
a) In the short run, the plant's capital is fixed at K = 9. Find the amount of labor it must employ to produce Q = 45 units of output.
b) How much money is the firm sacrificing by not having the ability to choose its level of capital optimally?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.