Suppose that hospitals use nurses (N), doctors (D) to perform surgeries (Q). The production function for surgeries is: Q = F(N;D), where F(N;D) is some function that increases in N and D. Assume that the marginal products of N and D are diminishing
Suppose that, in the short run, a hospital hires only robots (in addition to the one doctor). What is the underlying short-run production technology? What does the hospital’s choice imply about the relative marginal products of nurses and robots?