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1. A firm operates with the production function Q = 5.4K 0.3 L0.5.
(a) If the price of labor and capital are $10 and $20, respectively, and the firm's management has decided to spent only $7,000 daily on production costs, how many units of output can the firm produce? (Use the substitution method).
(b) How many units of labor and capital does firm employ?
(c) If the price of the good is $20 per unit, what is the daily profit for this firm?
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