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Consider a firm with technology given byq=f(L,K)=(L 1/2 +K 1/2 ) 2 . Capital is fixed atK=K=1in the short-run. The prices of output, labor and
Consider a firm with technology given byq=f(L,K)=(L1/2+K1/2)2. Capital is fixed atK=K=1in the short-run. The prices of output, labor and capital are given by the constant vector:(p,w,r)=(0.75,1,1). How much should the firm produce to maximize profit in the short-run? (round your answer to one decimal place if necessary)
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