Question: A competitive firm has the following production function based on capital (K) and labour (L), q = 60K + 34L - 4KL - 6K2 3L2

A competitive firm has the following production

A competitive firm has the following production function based on capital (K) and labour (L), q = 60K + 34L - 4KL - 6K2 3L2 The total cost of production is, TC = wL + OK If p is the market price, w is the wage, and r is the rental rate of capital, then solve for the optimal K and L that maximize profits. A. K* = 6Pr - 4Pw - 224P2, L* = 12Pw - 4Pr - 16822 OB. K* = 10Pr 15Pw - 200P2, L* = 7Pw - 14Pr - 169P2 O C. K* = 12Pr - 4Pw + 100P2, L = 12Pw - 4Pr - 210P2 OD. K* = 21 Pr +4Pw - 24P2, L* = 15Pw + 8Pr 165P2

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