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