A Producer Has a Production Function Given By: Y(l₁,l₂)= L₁⁰

question 81

Essay

A producer has a production function given by: y(l₁,l₂)= l₁^0.5+2l₂^0.5 where y is the level of output and l₁ and l₂
are two different types of labour that are employed. Their cost is w₁ and w₂ respectively.
a)Suppose that the input prices are both equal to w and that the output sells at price p. What is the optimal employment of two types of labour as a function of p and w?
b)Suppose that p=10, w=5. What is the optimal quantity of output produced? What is the corresponding profit?
c)What returns to scale does the production function exhibit?

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Environment

The surrounding conditions, influences, or forces which affect the life, behavior, and development of individuals or populations.

Wellness

A holistic state of well-being encompassing physical, mental, and social health, not merely the absence of disease or infirmity.

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Factors that influence the characteristics, behaviors, health, and well-being of members within a community.