Suppose that the production Is given as follow: Q(N) = 22VN, where N = units of labor employed The price of output is $10 per unit and input price is $15 per unit e 1. Derive the profit function. 2. Find N that maximizes profit and compute the profit. 3. Show that the profit function is concave.

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter10: Cost Functions
Section: Chapter Questions
Problem 10.7P
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Suppose that the production function is given as follow:
Q(N) = 22VN, where N = units of labor employed
The price of output is $10 per unit and input price is $15 per unit employed.
1. Derive the profit function.
2. Find N that maximizes profit and compute the profit.
3. Show that the profit function is concave.
Transcribed Image Text:Suppose that the production function is given as follow: Q(N) = 22VN, where N = units of labor employed The price of output is $10 per unit and input price is $15 per unit employed. 1. Derive the profit function. 2. Find N that maximizes profit and compute the profit. 3. Show that the profit function is concave.
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