A competitive firm produces output given by the production function Q = L0.25 K0.25, whereL and K are labor and capital respectively. The firm charges a price of 4 PHP per unit of output produced, and faces a price of 2 PHP per unit of labor and a price of 4 PHP per unit of capital employed. • Compute for the profit-maximizing levels of labor and capital that the firm should employ. • Verify that the values of L and K obtained in the first bullet are indeed profit-maximizing. • Compute for the maximum profit

A competitive firm produces output given by the production function Q = L0.25 K0.25, whereL and K are labor and capital respectively. The firm charges a price of 4 PHP per unit of output produced, and faces a price of 2 PHP per unit of labor and a price of 4 PHP per unit of capital employed. • Compute for the profit-maximizing levels of labor and capital that the firm should employ. • Verify that the values of L and K obtained in the first bullet are indeed profit-maximizing. • Compute for the maximum profit

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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When the production function is linear, q = 0.20L + 0.10K, the factors are perfect substitutes for one another and the isoquant is linear. Determine the equation for the isoquant when output equals 200 units. K= Assuming capital is plotted on the vertical axis and labor is plotted on the horizointal axis, what is the marginal rate of technical substitution (MRTS) in this case? MRTS = - (Enter a numeric response using a real number rounded to two decimal places.) tv MacBook Air DII F4 F6 F7 FB F10 F3 %23 & 3 4 5 7 8 { [ E R Y P D F G H J K > C N M command option .. .. - B >
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Given the Production function for Mwaba & Mutale Enterprises as follows: Q = f (k,l) = 300k 2l2 - k 3l3, Assuming the value of K is 5, Determine the value of L, for which APL is maximum Prove that at the point where MPL is equal to APL , APL is maximum. The value of labor input L, for which output is maximum Total output at this value of labour
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choose the right answer: a) P=8, q=9 b) P=16, q=8 c) P=40, q=5 d) P=24, q=7
= $30 and wage rate Let the production function be given by: q = 10(L^2)K, with rental rate v W = $20. 1. How much K and L are employed to produce 11,250 units of output? 2. Suppose that the firm wants to increase output to 19, 440 units of output, now how much K and Lare employed to produce with minimize cost? 3. Suppose that in the short run the amount of capital is fixed at K = 10, what is the firm short run fixed cost? 4. Suppose that in the short run the amount of capital is fixed at K = 10, what is the short run total cost of producing 900 units of output?
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