Question 6 Profit maximization A firm faces the following production function q = 100L0.6K0.6 The wage rate, w, is $4.00 and the price of capital, r, is $2. 1. If the firm uses 100 units of capital...

Question 6 Profit maximization<br>A firm faces the following production function<br>q = 100L0.6K0.6<br>The wage rate, w, is $4.00 and the price of capital, r, is $2.<br>1. If the firm uses 100 units of capital how much labor should it use to minimize<br>costs?<br>2. Does this production technology exhibit increasing, constant, or decreasing<br>returns to scale? Why?<br>

Extracted text: Question 6 Profit maximization A firm faces the following production function q = 100L0.6K0.6 The wage rate, w, is $4.00 and the price of capital, r, is $2. 1. If the firm uses 100 units of capital how much labor should it use to minimize costs? 2. Does this production technology exhibit increasing, constant, or decreasing returns to scale? Why?

Jun 07, 2022

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Question 6 Profit maximization A firm faces the following production function q = 100L0.6K0.6 The wage rate, w, is $4.00 and the price of capital, r, is $2. 1. If the firm uses 100 units of capital...

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