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A profit maximizing firm has a production function such that:
Y=K2L2
a) If P=10,rk=2,andWL=3 , what would be its optimum be? How can you show that it is a maximum?
b) How would the answer change if it needs to produce at least 100 units of Y and that it now is a cost minimizing firm?
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Calculate the equilibrium price and quantity?
derive the isoprofit functin
What is most likely to go wrong in the analysis of direct material and other direct costs and what could be done about it.
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