1/4 1/2 Based on the production function above a. What is the short run maximizing rule condition? b. What is the optimal demand of input? c. What is the optimal output? d. If the price of input/output increases, what happens to output supply and input demand?

1/4 1/2 Based on the production function above a. What is the short run maximizing rule condition? b. What is the optimal demand of input? c. What is the optimal output? d. If the price of input/output increases, what happens to output supply and input demand?

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter9: Price Takers And The Competitive Process

Section: Chapter Questions

Problem 8CQ

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Question

1/4 1/2
Based on the production function abovel
a. What is the short run maximizing rule condition?
b. What is the optimal demand of input?
c. What is the optimal output?
d. If the price of input/output increases, what happens to output supply and input demand?

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Step 1: Define production function

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Step 2: a. Determine the short run maximizing rule condition

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Step 3: b. Determine optimal level of input.

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Step 4: c. Determine the optimal output

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Step 5: d. Determine the change in increase in price of output and input

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