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