The production function is given by f(x) =4x^1/2.If the price of the commodity produced is $60 per unit and the cost of the input is $10 per unit, how much profit will the firm make if it maximizes profits?

A) $1,440
B) $718
C) $2,884
D) $1,425
E) $723

Question

Whitney Cook Rouse · Accepted Answer

Final Answer : A, Explanation :  To maximize profit, set marginal revenue equal to marginal cost. The marginal product is f'(x) = 2x^(-1/2). The revenue is 60f(x) and cost is 10x. Solving for x gives x = 36. Profit is 60f(36) - 10(36) = $1,440.

The production function is given by f(x) =4x^1/2.If the price of the commodity produced is $60 per unit and the cost of the input is $10 per unit, how much profit will the firm make if it maximizes profits?

A) $1,440
B) $718
C) $2,884
D) $1,425
E) $723

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Learning Objectives

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The production function is given by f(x) =4x1/2.If the price of the commodity produced is $60 per unit and the cost of the input is $10 per unit, how much profit will the firm make if it maximizes profits?A) $1,440B) $718C) $2,884D) $1,425E) $723

Definitions

Learning Objectives

Learning Objectives

Related questions

The production function is given by f(x) =4x^1/2.If the price of the commodity produced is $60 per unit and the cost of the input is $10 per unit, how much profit will the firm make if it maximizes profits?

A) $1,440
B) $718
C) $2,884
D) $1,425
E) $723