7. Fred's Factory 200 a'ne Fred' Factory sells in a perfectly competitive market. Fred's production function is: Q = 6L½K½ Prices of the output and inputs are: P = 2 w = 1 r = 8 a. Calculate Fred's long-run profit-maximizing employment of labor and capital. Also find Fred's profit-maximizing output, revenue, cost, and profit. Q* ル+6K L* = K* = max L= R* = C* = E ml sdd yd bo beb a N* = b. Calculate output, cost, revenue, and profit if Fred's Factory employs 27 units of labor and 27/8 units of capital. Q = R = C =

7. Fred's Factory 200 a'ne Fred' Factory sells in a perfectly competitive market. Fred's production function is: Q = 6L½K½ Prices of the output and inputs are: P = 2 w = 1 r = 8 a. Calculate Fred's long-run profit-maximizing employment of labor and capital. Also find Fred's profit-maximizing output, revenue, cost, and profit. Q* ル+6K L* = K* = max L= R* = C* = E ml sdd yd bo beb a N* = b. Calculate output, cost, revenue, and profit if Fred's Factory employs 27 units of labor and 27/8 units of capital. Q = R = C =

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: The Markets For The Factor Of Production

Section: Chapter Questions

Problem 3PA

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