A firm can buy inputs k and l at 32 per unit and 20 per

Question

Question: 1. A firm can buy inputs K and L at £32 per unit and £20 per unit respectively and sell its output at a fixed price of £5 per unit. How should it organize production to ensure maximum profit if it faces the production function Q = 82K0.5L0.3?

2. Derive the total differentials of the following production functions:

(a) Q = 20K^0.6L^0.4

(b) Q = 48K^0.3L^0.2R^0.4

(c) Q = 6K^0.8 + 5L^0.7 + 0.8K²L²