The Production Function Is Given by F(x) =

question 36

Multiple Choice

The production function is given by f(x) = . If the price of the commodity produced is $60 per unit and the cost of the input is $20 per unit, how much profit will the firm make if it maximizes profits?

• A) $1,444
• B) $705
• C) $720
• D) $358
• E) $363

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Definitions:

Activity Variance

measures the difference between the actual costs incurred and the budgeted costs based on the actual level of activity.

Actual Revenue

The real income that a company receives from its business activities, measured over a specific period.

Static Planning Budget

A budget for a specific amount of sales or production that does not change as volume changes.

Activity Variance

The difference between the planned activity and the actual activity in terms of costs or hours.