Suppose the short-run production function for a firm producing books is given by: Q = 4L...

 

Transcribed Image Text:

Suppose the short-run production function for a firm producing books is given by: Q = 4L -0.4L² + 2K where Q is the number of books produced, L is the amount of labour used and K is the amount of capital used. The costs per unit of labour and capital are GHe 10 and GH¢7.5, respectively. If the unit price of a book is GH¢15 and 8 units of capital are employed, determine the optimal input usage and the maximum profit that the firm would obtain at the optimal input level. 4 marks Suppose the short-run production function for a firm producing books is given by: Q = 4L -0.4L² + 2K where Q is the number of books produced, L is the amount of labour used and K is the amount of capital used. The costs per unit of labour and capital are GHe 10 and GH¢7.5, respectively. If the unit price of a book is GH¢15 and 8 units of capital are employed, determine the optimal input usage and the maximum profit that the firm would obtain at the optimal input level. 4 marks

Answer rating: 100% (QA)

To determine the optimal input usage and the maximum profit for the firm we need to find the values ... View the full answer