Which of the Following Profit Functions Exhibits a Linear Production

question 149

Multiple Choice

Which of the following profit functions exhibits a linear production function?

• A)  = P × K^0.75L^0.50 − 20L − 35K
• B)  = P × min (2L, 5K) − 20L − 35K
• C)  = P × (3K + 4L) − 20L − 35K
• D)  = P × (3K^0.5 + 4L^0.5)^1/0.2 − 20L − 35K

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Definitions:

Desired Sum

An intended total amount or goal that one aims to achieve through calculation or accumulation.

Single Sum

A financial calculation used to find the future value of a lump sum investment.

Five-Year Period

A span or timeframe that extends for five consecutive years.

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows or the rate used by financial institutions for interbank lending and borrowing.