Question: A firm has production function q= L 1/3 K 1/3 We assume that: w=1 r=1 K=1 a) Suppose this firm is a price taking firm

A firm has production function q= L1/3 K1/3

We assume that: w=1 r=1 K=1

a) Suppose this firm is a price taking firm

Show that the firm breaks even with (=0) when price is P=3(321)2

b) Suppose that firm is a monopoly:

The market demand function is P=90 - 23 Q

As a single price monopoly, show that the firm's maximum profit is =286.5

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