Profit-maximizing quantity of output

Assignment Help Business Economics
Reference no: EM132023778

Suppose that a firm's technology is given by the following production function:

f(k,L) = 6k^1/6*L^1/6

1. Prove that this production function exhibits diminishing marginal product in both  and . This is not the same thing as decreasing returns to scale.

2. Prove that this production function exhibits decreasing returns to scale.

Suppose that the rental rate of capital is $10, the wage rate of labor is $10, and the price of output is $40.

3. What is the profit-maximizing quantity of capital and labor?

4. What is the profit-maximizing quantity of output?

5. What is the maximum profit for this firm?

Reference no: EM132023778

Questions Cloud

What is the amount of this employee net pay : The employee has $95 in federal income taxes withheld. What is the amount of this employee's net pay for the first week of January
Discuss the potential customers for the product-service : Describe the product/service including the benefits of using the product/service. Discuss the potential customers for this product/service.
What is meant by the term break-even point : Companies such as Snowboard Company often want to know the sales required to break even, What is meant by the term break-even point
Briefly discuss how diversity might influence such abuse : Briefly discuss how diversity might influence (hinder or aid) such abuse. Explain the ethical implications of cultural abuse of leader/manager power.
Profit-maximizing quantity of output : Prove that this production function exhibits diminishing marginal product in both and . This is not the same thing as decreasing returns to scale.
How much is total manufacturing costs incurred : During 2011 the company purchased $150,000 of raw materials, incurred direct labor costs of $215,000, How much is total manufacturing costs incurred
What is ending fund balance for central city operating fund : Question - What is the ending fund balance for Central City's Operating Fund, given the following: $10,000 - Beginning fund balance
Describe the early childhood program : What aspects of the physical, social, and emotional environments support respect for families and welcome their diverse characteristics and abilities?
Explain how you would use ofa to set up the file system : What is the OFA? Explain how you would use OFA to set up the file system for creation of an Oracle database with two instances?

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

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