Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Business Management Expert

Management Studies


Home >> Business Management

[Profit maximizing input demand]

Consider a competitive firm with the following profit functionΠ = R-C = PQ-wL-rK,whereP = Price of the outputQ = OutputL = Labor inputK = Capital inputw = wage rate for labor inputr = rental rate for capital inputandQ(K,L) = 16K14 L14 .(a) Find the input quantities K∗and L∗that satisfy the first order conditions for the profitmaximization. Assume the parameter values P = 4, w = 1, and r = 1.(b) Compute the profit maximizing output Q∗.(c) Compute the maximum profit Π∗.(d) If the wage rate w changes to w = 2, determine the new L∗∗.(e) If the rental rate r changes to r = 2, determine the new L∗∗.(f) If the output price P changes to P = 16, determine the new L∗∗.Hint: All other parameters remain as in the original case in last three parts.(g) Also compute the profit maximizing output Q∗∗ and the maximum profit in each caseΠ∗∗ in each of the last three parts, i.e., (d)-(f).

Business Management, Management Studies

  • Category:- Business Management
  • Reference No.:- M92080372
  • Price:- $20

Priced at Now at $20, Verified Solution

Have any Question?


Related Questions in Business Management

What kind of challenges and opportunities is four seasons

What kind of challenges and opportunities is Four Seasons Hotels facing in terms of processes and lateral capabilities? Please provide references for your answers.

What kind of challenges and opportunities is four seasons

What kind of challenges and opportunities is Four Seasons Hotels facing in terms of processes and lateral capabilities? Please provide references for your answers.

Rideon inc is an automobile company that has strategic

RideOn, Inc., is an automobile company that has strategic alliances with two entities: a supplier in India and a manufacturer in South Africa. RideOn's vehicles are known for being of good quality, but they are more expe ...

Identify a typical type of project in your profession or

Identify a typical type of project in your profession or field of study. Research the top two to three most common project costing/estimating techniques used for this type of projects. Provide the following: Name the pro ...

According to firestones tire recall case evaluate and

According to Firestone's tire recall case, evaluate and discuss the role of leadership when commercial realities conflict with the public safety concerns and the ethical dilemma that ensue for leaders in such situation. ...

1 how could a manager educate stakeholders on effective

1) How could a manager educate stakeholders on effective risk management? 2) How risk management should relate to the scope, schedule and budget?

Suppose the chance of selecting a female adult at random in

Suppose the chance of selecting a female adult at random in the population is exactly π= 0.5 (ie: 50%). What is the probability that I choose 10 adults at random and I get the number of females in the sample to be betwee ...

Consider the ip rights to the information in the design

Consider the I.P. rights to the information in the design, manufacturing and advertising of a wireless computer modem. For those of you who are not sure what that is, if you have a WiFi network set up at home or in your ...

Not all context free grammars define regular languages

Not all context free grammars define regular languages. However, the following two DO define regular languages. For each grammar below, (a) describe the corresponding language and (b) draw the corresponding finite state ...

1 what are some reasons why on-the-job training ojt can

1) What are some reasons why on-the-job training (OJT) can prove ineffective? What can be done to ensure its effectiveness? 2) Explain how technology has changed the learning environment. Please list sources

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As

Follow Us

© Copyright 2013-14 mywordsolution.com All rights reserved