The Production Function for a Competitive Firm Is Q =

question 130

Multiple Choice

The production function for a competitive firm is Q = K^.5L^.5.The firm sells its output at a price of $10,and can hire labor at a wage of $5.Capital is fixed at 25 units.The profit-maximizing quantity of labor is:

• A) 1.
• B) 2.
• C) 10.
• D) None of the answers are correct.

---

Definitions:

GAAP

Generally Accepted Accounting Principles, a set of accounting standards and procedures used in the U.S. to govern financial reporting and ensure consistency.

Accounting Standards

Rules and guidelines used in the preparation and presentation of financial statements to ensure accuracy, completeness, and consistency.

Asset

Anything of value owned by a company.