Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The technology employed by a price-taking firm in both its input and output markets is described by the production function Q= f(L, K) = 20

The technology employed by a price-taking firm in both its input and output markets is described by the production function

Q= f(L, K) = 20 * L + 25 * K - L2 - 3K2

The firm is currently using the input combination: (L, K) = (15, 1)

Which of the following options is not true?

  1. The firm is experiencing diminishing returns with respect to both labour and capital.
  2. The firm is maximizing profits.
  3. The marginal physical product of labour is independent of the quantity of capital.
  4. The firm is producing Q = 97units of output.
  5. Not enough information is supplied to provide an answer.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Environmental Economics

Authors: Barry Field, Martha K Field

5th Edition

0073375764, 9780073375762

More Books

Students also viewed these Economics questions

Question

What is a time-series forecasting model?

Answered: 1 week ago