Explore BrainMass
Share

Explore BrainMass

    Finding the maximum profit and the values of L and K.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    A firm's production function is given by ....(see attachment) , where Q, L and K denote the number of units of output, labour and capital. Labour costs are $2 per unit, capital costs are $1 per unit and output sells at $8 per unit.

    The profit function is .......

    Find the maximum profit and the values of L and K at which it is achieved.

    © BrainMass Inc. brainmass.com October 10, 2019, 3:34 am ad1c9bdddf
    https://brainmass.com/economics/output-and-costs/maximum-profit-values-l-k-425389

    Attachments

    Solution Preview

    We are given the profit function, so we want to find the values of L and K such that the profit is the highest.

    To maximize a function of two variables, we take the partial derivatives ...

    Solution Summary

    This solution shows step-by-step calculations to determine the maximum profit and the values of L and K.

    $2.19