Determine profit maximizing quantity of upholstery

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Q. You are manager of Bonnie=s Unknown Lexicon Lists, Silly Hat Incorporation Tapestry Company. A company dedicated to making tapestry and upholstery fabric. You have hired a consultant to determine that your production function is provided by Q = K.25L.40F.2D.20 Where K equals units of Capital, L equals number of hours of labour, F equals yards of fabric and D equals gallons of dye.

You have determined (by finding both your marginal cost function and your marginal revenue function) that your profit maximizing quantity of upholstery is 125,000 yards. If real interest rate is 4.5%; wage rate is $14 per hour; cost of fabric is $10 per yard; and cost of dye is $13 per gallon. Find cost minimizing quantities of each of inputs.

Reference no: EM1370763

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