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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.

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