A firm's short-run production function is q = 3L0.2, while its cost function is C = 2L. Furthermore, the firm can sell its output in a perfectly competitive market at p = 40. 6.1 Find the value of the firm's profit when L = 50. L that satisfies the first-order condition for profit 6.2 Calculate the level of maximization. 6.3 Calculate the value of the second order derivative (SOD) that ensures profit is being maximised at the value of L found in 6.2 .

A firm's short-run production function is q = 3L0.2, while its cost function is C = 2L. Furthermore, the firm can sell its output in a perfectly competitive market at p = 40. 6.1 Find the value of the firm's profit when L = 50. L that satisfies the first-order condition for profit 6.2 Calculate the level of maximization. 6.3 Calculate the value of the second order derivative (SOD) that ensures profit is being maximised at the value of L found in 6.2 .

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter2: Mathematics For Microeconomics

Section: Chapter Questions

Problem 2.2P

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