Friday
April 18, 2014

Homework Help: Economics

Posted by Anonymous on Thursday, May 6, 2010 at 1:14pm.

Consider a profit maximizing competitive firm with the following production function: y=L^α+K^β where
0 <α< 1 and 0 <β< 1. The firm can purchase labor (L) and capital (K) it wants in competitive input market at unit prices of w and r, respectively. The market price of the firm’s output is p.

a) Find the profit maximizing quantities of labor, L* and capital, K* and output, Y*.

b) Is Y* an increasing function of output price?

c) How does the profit maximizing level of output change when the rental rate of capital is decreased?

Answer this Question

First Name:
School Subject:
Answer:

Related Questions

Trigonometry - The quadratic equation x^2−9x+10=0 has roots tanα and ...
math - Complex numbers α and β satisfy αα¯=ββ¯=&#...
Math - If α and β are two angles in Quadrant II such that tan α...
Economics - you are hired as the consultant to a monopolistically competitive ...
Pure Mathematics - 4) The roots of the equation z^2+2z+4=0 are denoted by α...
economics - You are hired as the consultant to a monopolistically competitive ...
World Geography - REVIEW 1.What natural resource most attracted European traders...
Math/Economics - Suppose that a firm has only one variable input, labor, and ...
Math/Economics - Suppose that a firm has only one variable input, labor, and ...
Economics - For the following characteristic say whether it describes a ...

Search
Members