firm estimates its production function as Q = -2.4 + 20*L -.5*L2 + 30*K -1.00*K2 + 15*F -.3*F2. Total cost is TC = $2*L + $2.5*K + $1.75*F. The firm can sell all the output it wishes at $200 per unit. Use Excel or otherwise to find the cost minimizing and profit-maximizing amounts of L, K and F. How much F (Fuel) should the firm use?

firm estimates its production function as Q = -2.4 + 20L -.5L2 + 30K -1.00K2 + 15F -.3F2. Total cost is TC = $2L + $2.5K + $1.75*F. The firm can sell all the output it wishes at $200 per unit. Use Excel or otherwise to find the cost minimizing and profit-maximizing amounts of L, K and F. How much F (Fuel) should the firm use?

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Proudction Costs

Section: Chapter Questions

Problem 8SQ

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