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

Replicate the estimations in Table 2 on page 82 of Graddy (1995), but excluding the data of King Whiting.


Popularity vs. True Quality What determines the popularity of YouTube videos? Are the most viewed videos really the ones people like the most? What drives people choose certain

Probelm: (a) Differentiate between homoscedasticity and heteroscedasticity. (b) Outline the reasons why the variances of disturbance term may vary. (c) Given the 3 observ

Outdoor Travel Inc. needs to estimate the cost of capital for the evaluation of capital expenditures. A typical project is financed with 25% debt-to-value ratio (i.e., D/(D+E) = 0.

You are a property insurer and one of your potential clients, whose current wealth is $450,000, wants to insure her $250,000 house.  The chances of the house burning down in any gi

1. Consider a mixture of one mole of Nitroglycerin and one mole of Ammonium Nitrate a. Write the detonation equation for this mixture b. Using class notes, posted articles in

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 thick walled cylinder has internal and external diameters of 120 mm and 420 mm respectively. It is made from a ductile elastic material of your choice and is used to contain hot