Liam has a t-shirt print screening business with a production function of Q = K²L¹/2 = K2√L. Q is the number of t-shirts Liam prints, K is capital and L is labor. K is fixed at 4 in the short run. The price of K is $200 (r=$200) the price of L is $256 (w=$256). If the t-shirt industry is perfectly competitive and the price of a t-shirt is $10/shirt Liam will profit maximize by producing: O 10 t-shirts 25 t-shirts 200 t-shirts 5 t-shirts 2 t-shirts
Liam has a t-shirt print screening business with a production function of Q = K²L¹/2 = K2√L. Q is the number of t-shirts Liam prints, K is capital and L is labor. K is fixed at 4 in the short run. The price of K is $200 (r=$200) the price of L is $256 (w=$256). If the t-shirt industry is perfectly competitive and the price of a t-shirt is $10/shirt Liam will profit maximize by producing: O 10 t-shirts 25 t-shirts 200 t-shirts 5 t-shirts 2 t-shirts
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Liam has a t-shirt print screening business with a production function of
Q = K²L¹/2 = K2√L. Q is the number of t-shirts Liam prints, K is capital
and L is labor. K is fixed at 4 in the short run. The price of K is $200 (r=$200) the
price of L is $256 (w=$256).
If the t-shirt industry is perfectly competitive and the price of a t-shirt is $10/shirt
Liam will profit maximize by producing:
O 10 t-shirts
25 t-shirts
200 t-shirts
5 t-shirts
2 t-shirts
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