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A firm employs labour L and capital K = 10 to produce using the production function q = 60K²L²-K³L³. Graph APL and MPL.

A firm employs labour L and capital K = 10 to produce using the production function q = 60K²L²-K³L³. Graph APL and MPL.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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1. A firm employs labour L and capital K = 10 to produce using the production function q = 60K²L2-K³L³. Graph APL and MPL. 2. A firm with q = K1/2L1/2 sells output at p = 4 and hires inputs at w = 2 and r = 3. Short-run K = 4. Provide an Isoprofit Analysis to illustrate and quantify the firms profit maximizing levels of employment and output. On the same diagram, illustrate and quantify how this firm would behave if the price of output declined to 2. 3. A firm with q = K1/2L1/2 sells output at p = 4 and hires inputs at w = 2 and r = 3. Short-run K = 4.Graph SAFC, SAVC, SAC and SMC. Illustrate profits at p = 4. On the same diagram, illustrate and quantify how this firm would behave if the price of output declined to 2.
Transcribed Image Text:1. A firm employs labour L and capital K = 10 to produce using the production function q = 60K²L2-K³L³. Graph APL and MPL. 2. A firm with q = K1/2L1/2 sells output at p = 4 and hires inputs at w = 2 and r = 3. Short-run K = 4. Provide an Isoprofit Analysis to illustrate and quantify the firms profit maximizing levels of employment and output. On the same diagram, illustrate and quantify how this firm would behave if the price of output declined to 2. 3. A firm with q = K1/2L1/2 sells output at p = 4 and hires inputs at w = 2 and r = 3. Short-run K = 4.Graph SAFC, SAVC, SAC and SMC. Illustrate profits at p = 4. On the same diagram, illustrate and quantify how this firm would behave if the price of output declined to 2.
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