Question
A FIRM USING 2 INPUTS, LABOUR HOURS L AND CERTAIN RAW MATERIAL R AS VARIABLE INPUT, ALL OTHER INPUTS ARE FIXED. THE PRODUCTION FUNCTION IS
A FIRM USING 2 INPUTS, LABOUR HOURS L AND CERTAIN RAW MATERIAL R AS VARIABLE INPUT, ALL OTHER INPUTS ARE FIXED. THE PRODUCTION FUNCTION IS GIVEN AS;
q=40L - 2L2 +24K -K2
THE WAGE OF LABOR W IS 8 dollars and the price of capital is 4 dollars per unit; firm has buget of 56 dollars for the total combined wage of labor and price of raw material
- DOES THE FIRM HAVE INCREASNG OR DECREASING OR CONSTANT RETURN TO SCALE AND WHY
- DRIVE THE MARGINAL PRODUCT OF LABOR AND CAPITAL
- WHAT IS THE OPTIMAL LEVEL OF LABORS AND CAPITAL THE FIRM SHOULD USE IN ORDER TO GET MAX PROFIT
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Quantitative Chemical Analysis
Authors: Daniel C. Harris
8th edition
1429218150, 978-1429218153
