Marlon produces marbles using one input, glass with a production function y = 4G^0.5. Glass costs $50 per pound, and marbles sell for $100 each.

a) What's his profit maximizing production plan? What is his profit?

b) Suppose the city decides to tax his marbles at $20 per marble, but there is now a subsidy on glass at $10 per pound. What's his new profit maximizing production plan?

Answer rating: 100% (QA)

To find the profitmaximizing production plan for Marlon we need to maximize his profit which is give... View the full answer