Maximising levels of capital, Econometrics

A perfectly competitive firm hires its machines at a constant rental rate of r = 5 euros per unit and its workers at a constant wage rate of w = 4 euros per unit. It can also sell as much output as it wishes at the ruling market price of P = 40 euros. The firm's production function is given by:  

 Q = K0.25 L0.5

where L  is labour and K  is capital.

(a) If the firm wishes to maximise profits, write down the constrained maximum problem that the firm faces.

(b) Determine the profit maximising levels of capital, labour and output. 

Posted Date: 3/25/2013 5:35:25 AM | Location : United States







Related Discussions:- Maximising levels of capital, Assignment Help, Ask Question on Maximising levels of capital, Get Answer, Expert's Help, Maximising levels of capital Discussions

Write discussion on Maximising levels of capital
Your posts are moderated
Related Questions
Factor that affect the volume of production

What trends do you see in the Economic, Political, and Cultural environment of society that will affect the industry in the future? Answer) The trends that will affect the indus

Production Functions, Labor Markets, and a Small Open Economy. In 2007, the Icelandic economy was in general equilibrium, the supply of labor was a positive function of the real

how can the factors of production be occupationally mobile


how to calculate trade potential on eviews?

what model should i use for economic services and how to run spss for the same?

Consider a linear model to explain pricing of houses: Price = ß0 + ß1lotsize + ß2sqrft + ß3bdrms + u (1) E(u| lotsize, sqrft, bdrms)=0 Var (u| lotsize, sqrft, bdrms)=s2 lotsize4

A  firm manufactures  and  sells  a  product  that  has  the  following  demand function:       Q = 180 - 4P   where P  is price, Q  is quantity.  It also  faces  the  following

A chance sample of visitors to a National Park was interviewed regarding their impressions of the Park.  Of 200 interviewees, 120 said that they would probably make a return visit