Question
One company that produces construction equipments has a production function as below q = 10min(l, 4k)^ , where k is the number of heavy metal-cutting
One company that produces construction equipments has a production function as below q = 10min(l, 4k)^ , where k is the number of heavy metal-cutting machines running per week, and l is the number of workers hired to work per week. is a parameter indicating the returns to scale in this production function. 1. Suppose that = 0.5, calculate the firm's total cost function and profit function. 2. If the rental rate for the heavy metal-cutting machines is r = 1000 per week, and the wage rate for workers is w = 500 per week, and the price of the final product is p = 600, how many pieces of construction equipment will this firm produce? What are its profits?
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