output, revenues, costs, and profits
Not what you're looking for?
The Alex Co. uses two inputs, A and B, to produce boats. The production function for boats is given by
Q = A^0.5 x B^0.5, (or the square root of A multiplied times the square root of B)
and the marginal products of A and B are given by
MPa = 0.5Q/A
MPb = 0.5Q/B
The prices of inputs are given by Pa = $10 and Pb = $10
and the price of boats equals $30.
(a) If the Alex Co. has a total budget of $200 to spend on purchasing inputs, how many units of A and B should it hire?
(b)What will be its output, revenues, costs, and profits?
Purchase this Solution
Solution Summary
This solutions finds output, revenues, costs, and profits.
Solution Preview
a)
We have budget equation as 10A+10B=200
Solving we get A=20-B ------1.
Also we know that for ...
Purchase this Solution
Free BrainMass Quizzes
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.