Exercise 3

A manufacturer has modeled its yearly production function \(P\) (the monetary value of its entire production in millions of dollars) as a Cobb-Douglas function
\[P(L, K) = 1.47L^{0.65}K^{0.35}\]
where \(L\) is the number of labor hours (in thousands) and \(K\) is the invested capital (in millions of dollars). Find \(P(120, 20)\) and interpret it.