A firm estimates its production function as Q = -2.4 + 20*L -.5*L2 -3*F2. Total cost is TC = $2*L+ $2.5*K+ $1.75*F. The firm can sell all the output it wishes at $200 per unit. Use Excel to find the cost minimizing and profit-maximizing amounts of L, K and F. How much F (Fuel) should the firm use? A.F=7. B.F=12. C.F=16. D.F=19. E. F=25. + 30*K -1.00*K² + 15*F

A firm estimates its production function as Q = -2.4 + 20L -.5L2 -3F2. Total cost is TC = $2L+ $2.5K+ $1.75F. The firm can sell all the output it wishes at $200 per unit. Use Excel to find the cost minimizing and profit-maximizing amounts of L, K and F. How much F (Fuel) should the firm use? A.F=7. B.F=12. C.F=16. D.F=19. E. F=25. + 30K -1.00K² + 15*F

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter3: Benefits, Costs, And Decisions

Section: Chapter Questions

Problem 3.7IP

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Question

A firm estimates its production function as Q
= -2.4 + 20*L-.5*L< + 30*K -1.00*K2 + 15*F
-3*F2. Total cost is TC = $2*L+ $2.5*K +
$1.75*F. The firm can sell all the output it
wishes at $200 per unit. Use Excel to find the
cost minimizing and profit-maximizing
amounts of L, K and F. How much F (Fuel)
should the firm use?
A.F=7.
B.F=12.
C.F=16.
D.F=19.
E. F=25.
A competitive firm's production function is Q
= 100 + 40L - .5L2 + 20K – .5*K2, and its
demand function is PQ = MRQ
= d = $30. The prices of L and K are PL = $4
and PK = $12. Find the profit-maximizing
amount of output Q.
A.Q=878.
B.Q=924.
C.Q=1024.
D.Q=1100.
E. Q=1250

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