Suppose the Production Function Is Q = Min {3K, L}

question 160

Multiple Choice

Suppose the production function is Q = min {3K, L}.How much output is produced when 6 units of labor and 3 units of capital are employed?

• A)3.
• B)6.
• C)9.
• D)none of the statements associated with this question are correct.

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Definitions:

Long-Run Equilibrium

The state in which all factors of production and costs are variable, and firms earn normal profits in a competitive market.

Competitive Firm

A firm operating in a market with many competitors, where prices are determined by supply and demand forces.

Economic Profits

The difference between total revenue and total economic costs (including both explicit and implicit costs), representing surplus or profit not achievable in perfect competition.

Competitive Industries

Industries characterized by many firms competing for market share, leading to innovation and efficient resource allocation.