1/4 1/2 Based on the production function above a. What is the short run maximizing rule condition? b. What is the optimal demand of input? c. What is the optimal output? d. If the price of input/output increases, what happens to output supply and input demand?

1/4 1/2 Based on the production function above a. What is the short run maximizing rule condition? b. What is the optimal demand of input? c. What is the optimal output? d. If the price of input/output increases, what happens to output supply and input demand?

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter8: Production And Costs

Section: Chapter Questions

Problem 15QP

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Question

1/4 1/2
Based on the production function abovel
a. What is the short run maximizing rule condition?
b. What is the optimal demand of input?
c. What is the optimal output?
d. If the price of input/output increases, what happens to output supply and input demand?

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Step 1: Define production function

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Step 2: a. Determine the short run maximizing rule condition

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Step 3: b. Determine optimal level of input.

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Step 4: c. Determine the optimal output

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Step 5: d. Determine the change in increase in price of output and input

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