important need answers fast?
A firm uses capital K, Labour L, and land T to produce Q units of a commodity, where Q= K^2/3 +L^1/2 +T^1/3.
a) Suppose that the firm is paid p for each unit it produces and that the proces it pays per unit of K, L, T are r,w and q respectively. Find the values pf K,L,T(as functions of the 4 prices) that maximize the firm's profits,
(symbol for pie)=p(K^2/3 +L^1/2 +T^1/3)- rK-wL-qT
***max exists and all constants are positive
b) Let Q* denote the optimal number of units produced and K* the optimal captial stock. Show that (partial derivative)Q*/(partial derivative)r = - (partial derivative)K*/(partial derivative)p
- ApoloLv 61 decade agoFavorite Answer
Reading this kind of questions, I feel like a x-y (remember Brave New World - A. Huxley). I 'd like to have time to study, to learn about this...
I'll wait for an answer, by I'm afraid that noone will give a good answer - very hard question!
- Anonymous1 decade ago
Here you go. I have pasted some resources for you. The slide show should be exceedingly helpful. I will edit this as soon as I get the answer.Source(s): www.clt.astate.edu/crbrown/6313sp06no3.ppt If the above doesn't work, try this: http://www.google.com/url?sa=t&ct=res&cd=2&url=htt... http://www.math.montana.edu/frankw/ccp/modeling/si... http://en.wikipedia.org/wiki/Profit_maximization
- 1 decade ago
i have just finished calculus,, still cant help ya... too advanced for me... and i dont get what the question is asking... too life applicable to me