Let the production function of a firm be Q = 2L2K2 Find out the maximum possible output that the firm can produce with 5 units of L and 2 units of K.

L TC TFC = 20 TVC=TC - TFC AFC = TFC/Q AVC = TVC/Q SAC = AFC + AVC SMC = TCn - TCn -1 1 50 20 30 20 30 50 30 2 65 20 45 10 22.5 32.5 15 3 75 20 55 6.66 27.5 34.16 10 4 95 20 75 5 18.75 23.75 20 5 130 20 110 4 22 26 35 6 185      20 165 3.33 27.5 30.83 55

Q = 5L1/2K1/2 ....Equation (1) L = 100 units of labour K = 100 units of capital Putting these values in equation (1) Q = (100)1/2(100)1/2 = 5(10)(10) =500 units Thus, the maximum possible output that he...

Q = 5L + 2K …………………. (1) If L = 0 and K = 10, then putting these values in equation (1) Q = 5(0) + 2(10) = 20 units of output

Initial Price, P1 = Rs 10 Initial Output, Q1 = 4 units Final Price, P2 = Rs 30 ΔP = P2 - P1 = Rs 30 - 10 = Rs 20 Elasticity of supply,es =...

A monopolist firm can earn losses in the short run if the price is less than the minimum of AC. But if the price falls below the minimum of AVC,...

'The equilibrium level of output wiil be 4 units. This is because at this point the two conditions of equilibrium (using MR-MC approach are met . This can be seen...

The equilibrium level of output will be 4 units. This is because at this point the two conditions of equilibrium (using MR-MC approach) are met. This can be seen as...

MCn =TVCn-TVCn-1 MC16 = TVC16-TVC15 = 3,500 - 3,000 =Rs.500

(d) Average cost of producing 5 units is Rs.60.

No, it cannot be its equilibrium output because the MC exceeds the MR. The firm is running a loss.