Suppose that the production function of the firm is: Q = 100L1/2.K1/2 K= 100, P = $1, w = $30 and r = $40. Determine the quantity of labor that the firm should hire in order to maximize the profits. What is the maximum profit of this firm?
Suppose that the production function of the firm is: Q = 100L1/2.K1/2 K= 100, P = $1, w = $30 and r = $40. Determine the quantity of labor that the firm should hire in order to maximize the profits. What is the maximum profit of this firm?
Chapter10: Cost Functions
Section: Chapter Questions
Problem 10.6P
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Question
Suppose that the production function of the firm is:
Q = 100L1/2.K1/2
K= 100, P = $1, w = $30 and r = $40. Determine the quantity of labor that the firm should hire
in order to maximize the profits. What is the maximum profit of this firm?
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