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The production function for a competitive Firm is Q = K^ 0.5* L^ 0.5 . The Firm sells its output at a price of $10,
The production function for a competitive Firm is Q = K^0.5*L^0.5. The Firm sells its output at a price of $10, and can hire labor at a wage of $5. Capital is fixed at 25 units. Rent = $1. The average product of capital using 25 units of capital is:
A. 1.00
B. 0.49
C. There is insufficient information to determine the average product of capital
D. 1.25
determine the maximum profits for the Firm:
A. +$100
B. +$475
C. +$25
D. +$250
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