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Mathematics, 02.07.2021 23:40 emma8292
A manager hires labour and rents capital equipment in a very competitive market. Currently
the wage rate is GH¢2 per hour and capital is rented at GH¢5 per hour, the unit price of the
product is GH¢0.25 and total cost is 1000. Suppose the firm’s production function is as
follows:
� = 14�*.,�*., + 10
i. What is the amount of labour and capital the firm should employ in order to maximize
output? [Hint: Maximise the product function subject to the cost constraint]
ii. What is the maximum profit?
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Answers: 2
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A manager hires labour and rents capital equipment in a very competitive market. Currently
the wage...
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