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Determine the firm''s profit maximizing level of output

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1. Show that for production function Q = AKα Lβ the output elasticity of scale EQA is 1.

2. Consider a firm with the production function Q = 3.5K 0.45 L0.4. Assume the prices of the good, labor, and capital are $150, $80, and $120, respectively. Assuming $2,000 fixed cost, determine the firm's profit maximizing level of output, the optimal combination of capital and labor, and profit.

Reference no: EM13876972

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