# Suppose a firm has a production function given by Q = K^{0.5}L^{0.5}. The firm pays a wage of $64...

## Question:

Suppose a firm has a production function given by Q = {eq}K^{0.5}L^{0.5} {/eq}. The firm pays a wage of $64 per unit and pays a rental rate of the capital of $5 per unit. K = 256 in the short run. The maximum level of profit this firm could make in the short run if it charges a constant price of $100 is:

a. $8720

b. $10000

c. $9600

d. $6400

## Production function:

Production function shows the relationship between input and output. It means labor and capital are used to produce goods and services by converting raw material into the finished goods.

## Answer and Explanation: 1

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**None of the option is correct**

This option is correct because

Here, K= Capital

L= ,Labor

MRTS= Marginal rate of technical substitution

MPL=...

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Chapter 11 / Lesson 27Learn about the production function. Read the production function definition in economics, learn the production function formula. Plus, see graphs and examples.

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