Question 5 A manager hires labour and rents capital equipment in a very competitive market. Currently the wage rate is GH¢2 per hour and capital is rented at GH¢18 per hour, the unit price of the product is GH¢0.75 and total cost is 576. Suppose the firm’s production function is as ).(+ ).,+ follows: ? = 20? ? + 15 a) what is the amount of labour and capital the firm should employ to maximize output? b) What is the maximum profit?

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