Problem 2054 – The Cobb-Douglas production

The Cobb-Douglas production function for a bicycle company is given by f(x,y) = 23x0.2y0.8, Where x is the utilization of labor and y is the utilization of capital. If the company uses 1275 units of labor and 1694 units of capital, how many bicycles will be produced?


Given values in the questions are x = 1275 and y = 1694

Put these values in the given equation

f(x,y) = 23(1275)0.2(1694)0.8

       = 36809.56 ~ 36810

So the company will produce 36810 bicycles.

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