A Los Angeles firm uses a single input to produce a recreational commodity according to a production function f(x)=4x1/2, where x is the number of units of input. The price of the commodity is $100 per unit, and the input cost is $50 per unit. The fixed costs are zero.A: Write down the firm’s profit function.C:Find the profit maximizing amounts of input and output. What is the maximum profit?C:Suppose that the firm is taxed at $20 per unit of its output (note it is a quantity tax) and the price of its input is subsidized by $10 per unit. What is the new input and output levels? What is the new maximal profit? A Los Angeles firm uses a single input to produce a recreational commodity according to aproduction function f(x)=4x¹/2, where x is the number of units of input. The price of the commodity is$100 per unit, and the input cost is $50 per unit. The fixed costs are zero.a. Write down the firm's profit function.b. Find the profit maximizing amounts of input and output. What is the maximum profit?c. Suppose that the firm is taxed at $20 per unit of its output (note it is a quantity tax) and theprice of its input is subsidized by $10 per unit. What is the new input and output levels?What is the new maximal profit?

The production function is a numerical condition calcupation the connection between the factors and…

Answered: A Los Angeles firm uses a single input…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A Los Angeles firm uses a single input to produce a recreational commodity according to a production function f(x)=4x^1/2, where x is the number of units of input. The price of the commodity is $100 per unit, and the input cost is $50 per unit. The fixed costs are zero.

A: Write down the firm’s profit function.

C:Find the profit maximizing amounts of input and output. What is the maximum profit?

C:Suppose that the firm is taxed at $20 per unit of its output (note it is a quantity tax) and the price of its input is subsidized by $10 per unit. What is the new input and output levels? What is the new maximal profit?

A Los Angeles firm uses a single input to produce a recreational commodity according to a
production function f(x)=4x¹/2, where x is the number of units of input. The price of the commodity is
$100 per unit, and the input cost is $50 per unit. The fixed costs are zero.
a. Write down the firm's profit function.
b. Find the profit maximizing amounts of input and output. What is the maximum profit?
c. Suppose that the firm is taxed at $20 per unit of its output (note it is a quantity tax) and the
price of its input is subsidized by $10 per unit. What is the new input and output levels?
What is the new maximal profit?

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