The following production function and cost constraints are given find the values of L, K and 2 by using Ist order and 2nd order conditions where the firm is in equilibrium i,e maximizes oútput subject to cost constraints. Use substitution or T Lagrange method. i) Production function: Q = LK Cost function: PK = 5, PL = 2, C = 100 [ Ans. L = 25, K = 10, A = 5] %3D %3D ii) Production function: Q = LK + L K = 10 [ Ans. L = 28/3, K = 27, 2 = 14/3] %3! Pr = 6, PK = 2, C = 110 %3D 2.

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