Question
A production function is given by Q = 820K 0.3 L 0.2 . The firm procures inputs K at $65 and L $40. The price
A production function is given by Q = 820K0.3 L0.2. The firm procures inputs K at $65 and L $40. The price of the product is fixed at $12 per unit.
1. What is the relationship between the increasing amount of L and total profit ?
2. Will a change in K affect the extra profit derived from marginal increases in L?
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Survey of Accounting
Authors: Thomas P. Edmonds, Frances M. McNair, Philip R. Olds, Bor Yi
3rd Edition
978-1259683794, 77490835, 1259683796, 9780077490836, 978-0078110856
