5. Given Q = 10 K 04L00 a) Find the marginal productivity of capital and labour. b) If the company is currently using 3000 units of capital and 2000 units of labour, find the marginal productivity of capital and the marginal productivity of labour. c) For the greatest increase in productivity, should the management of the company encourage increased use of capital or increased use of labour?
5. Given Q = 10 K 04L00 a) Find the marginal productivity of capital and labour. b) If the company is currently using 3000 units of capital and 2000 units of labour, find the marginal productivity of capital and the marginal productivity of labour. c) For the greatest increase in productivity, should the management of the company encourage increased use of capital or increased use of labour?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:7. A monopolist sells two products x and y for which the demand functions are:
X = 12 – Px
Y = 18 – P y
And the combined cost function is
C = x² + 2xy + y
Find a) the profit maximizing level of output (x, y) for each product through optimization
of the profit function,
b) The profit maximizing price (P x, P y) for each product,
c) Find the maximum profit (7) value for the monopolist, and
d) Test the second order condition with Hessian.
Transcribed Image Text:5. Given Q = 10 K L*
a) Find the marginal productivity of capital and labour.
b) If the company is currently using 300X0 units of capital and 2000 units of labour, find the
marginal productivity of capital and the marginal productivity of labour.
c) For the greatest increuse in productivity, should the management of the company encourage
increased use of capital or increased use of labour?
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