Profit maximizing input demand

Assignment Help Business Management
Reference no: EM131325774

[Profit maximizing input demand]

Consider a competitive firm with the following profit functionΠ = R-C = PQ-wL-rK,whereP = Price of the outputQ = OutputL = Labor inputK = Capital inputw = wage rate for labor inputr = rental rate for capital inputandQ(K,L) = 16K14 L14 .(a) Find the input quantities K∗and L∗that satisfy the first order conditions for the profitmaximization. Assume the parameter values P = 4, w = 1, and r = 1.(b) Compute the profit maximizing output Q∗.(c) Compute the maximum profit Π∗.(d) If the wage rate w changes to w = 2, determine the new L∗∗.(e) If the rental rate r changes to r = 2, determine the new L∗∗.(f) If the output price P changes to P = 16, determine the new L∗∗.Hint: All other parameters remain as in the original case in last three parts.(g) Also compute the profit maximizing output Q∗∗ and the maximum profit in each caseΠ∗∗ in each of the last three parts, i.e., (d)-(f).

Reference no: EM131325774

Questions Cloud

Is john in a fiduciary relationship with international widge : Is John in a fiduciary relationship with International Widgets? Why or why not? Is he an agent of International Widgets? Identify the duties and responsibilities of an agent and whether or not John is fulfilling those obligations. Review your text..
Federal reserve bank in regulating the economy : 1. Read the Macroeconomics section of the article "noise" by Fischer Black and comment on the current state of the economy in that context. Just one page please. 2. Explain the role of the Federal Reserve Bank in regulating the economy. One page pl..
How could the risks and vulnerabilities be mitigated : Describe your asset. What sector does it fall within?What would a network that included this asset look like? Give examples.What sectors does your sector have interdependencies with? Give examples of these interdependencies.
Research the war on drugs : Research the "War on Drugs" and assess whether or not this is really a war. Discuss the connection between drugs, crime, and violence and whether or not the current approach to drug use and abuse has decreased crime and violence in the last 30-40 ..
Profit maximizing input demand : Consider a competitive firm with the following profit functionΠ = R-C = PQ-wL-rK,whereP = Price of the outputQ = OutputL = Labor inputK = Capital inputw = wage rate for labor inputr = rental rate for capital inputandQ(K,L) = 16K14 L14 .(a) Find th..
Construct a hedge that will protect against movements : Construct a hedge that will protect against movements in the stock market as a whole. Use the September stock index futures, which is priced at 375.30 on March 1 and which has a $500 multiplier.
What new civilian technology useful to police : What new civilian technology (that is not currently being widely used in law enforcement) do you think might be useful to police in the near future
Determine profit when position is closed on november 15 : Use the following information to construct a T-bond futures spread on July 15, and determine the profit when the position is closed on November 15.
Discuss how you applied each of steps in gebmo process : Discuss how you applied each of steps in GEBMO process and what risks you identified. Provide recommendations for preventing spills or releases. Discuss response actions required in the event of a spill or release.

Reviews

Write a Review

Business Management Questions & Answers

  Dna company mission - vision analyzed

A fictional company called DNA, created their mission and vision statements below. After reading the mission and vision, identify the priorities of DNA's management.

  House path-goal leadership theory

What are the situational factors of the House Path-Goal Leadership Theory? Please indicate resources.

  Describe the practical applications for human resource

Describe the practical applications for Human Resource Professionals inclusive of what you learned compared to what you knew prior

  Dominant religion and influences on cultural values

Explain the dominant religion(s) and the influences on cultural values.

  Identify the key ways that apple''s progress report

Identify the key ways that Apple's Progress Report has changed since last year. Examine the manner in which Apple's Supplier Code of Conduct helps the organization operate as a socially responsible organization.

  Resources needed for implementation based

Resources Needed For Implementation Based on mock terminations 150 word minimum

  Evaluate your project management option in terms of schedule

Evaluate your project management options in terms of schedule, performance, and cost for the following scenario. Support your evaluation.

  What do you think of the conduct of the women

At Saks Fifth Avenue, they call it the “return season.” Return season occurs within the week following a major fund-raising formal dance. Women who have purchased formal eveningwear return the dresses after the dance. What do you think of the conduct..

  Explain communication and control strategies

Define the concept of control and what are some benefits to the company now and in the future?

  Find the degree of operating leverage

Delphi Company has developed a new product that will be marketed for the first time during the next fiscal year. How many units of the new product must Delphi sell during the next fiscal year in order to break even on the product?

  What role did ngos play in the kimberley process

A) What role did NGOs play in the Kimberley Process? B.) How did the idea of corporate social responsibility (CSR) help push the diamond industry to take the conflict diamonds problem seriously?

  Compute the test statistic

Calculate the test statistic (you can use an ANOVA table for calculating purposes). List degrees of freedom, calculate the p-value of the test-statistic and draw conclusion.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd