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You are given the following production function:
Q = 20L + 65C - 0.2L² - 0.2C²
The firm's total budget is 3000, Capital (c) costs 50 per unit and labor (L) costs 20 per unit.
a)Find the quantities of capital and labor that maximize output, while at the same time, satisfy the firm's budget constraint.
b)What will happen to the firm's output if its budget is raised by 100?