A firm produces output that can be sold at a price of $10. The production function is given byQ = F(K, L) = K2L!2If capital is fixed at 1 unit in the short run, how much labor should the firm employ to max-imize profits if the wage rate is $2?

Given, Q = K1/2L1/2 Also, p= 10, capital(K)= 1 and wage rate(w) = 2 are given. Now, Profit = pQ - wL…

A firm produces output that can be sold at a price of $10. The production function is given by Q = F(K, L) = K²L12 If capital is fixed at 1 unit in the short run, how much labor should the firm employ to max- imize profits if the wage rate is $2?

A firm produces output that can be sold at a price of $10. The production function is given by Q = F(K, L) = K²L12 If capital is fixed at 1 unit in the short run, how much labor should the firm employ to max- imize profits if the wage rate is $2?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter10: Cost Functions

Section: Chapter Questions

Problem 10.3P

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