Profit maximization, Microeconomics

Profits University creates student credit hours (y) with two inputs: Professors' hours of work (x1) and TAs' hours of work (x2) according to the manufacture function: f(x1,x2)= 10x1.5x2.25. Both inputs are variable. Suppose professors are paid $80 per hour and TAs are paid $2.50 per hour. Profits receive $40 per credit hour.

 (Profit maximization, both inputs variable)

a)  What is the expression for profits as a function of prices and inputs?

b)  What is the expression for revenue? For marginal revenue products of every of the inputs?

c)  Calculate the two first order conditions for profit maximization. What do they mean?

d)  Calculate the inputs and outputs that will maximize Profit's profits. What is the maximum profit that Profits can make?

 

Posted Date: 3/29/2013 2:03:48 AM | Location : United States







Related Discussions:- Profit maximization, Assignment Help, Ask Question on Profit maximization, Get Answer, Expert's Help, Profit maximization Discussions

Write discussion on Profit maximization
Your posts are moderated
Related Questions
The "Battle of Sexes" is a famous game. The story is that a couple tries to decide what to do on a Friday evening. The girl prefers to go to an Opera and the guy prefers to go to t

Special Drawing Rights: The late 1960s witnessed that the growth in world resources did not keep pace with the growth in international trade. The slackness in the growth of re

Question: (a) With reference to the characteristics of market structure, describe why the market for powdered milk in Mauritius is an appropriate example of monopolistic compe


RECENT DEVELOPMENT OF DEMAND THEORY:  The basic theory of consumer behaviour discussed in the previous unit can be extended in many directions, and can be applied to cover opt

What aspects of amino acid structure are involved in the formation and stabilisation of beta-sheets in proteins?

EXCHANGE RATES: The current unit focuses on exchange rates and is a more in-depth study of foreign exchange markets from the perspective of financialeconomics.You have been ac

#q The price of a laptop increases by 20% and there is a 40% drop in the quantity demanded. • The price of a pack of cigarettes increases by 10% and there is a 5% drop in the quan

cartels model of collusive oligopoly

is country beter off with ban on imports?