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Question description

A competitive firm has the following production function: :;(<)400<60<66<?                   Where y = output, x = input. The firm faces an output price of P = 10 and an input

price of W = 5440.

i)  Write a profit function of this firm in terms of output and input prices and the

input level.

ii)   What is the profit maximizing level of input for this firm? Verify that the input

level you choose is the profit maximizing point.

iii)  Find the marginal product (MPx) of the variable input.

iv)  Verify that P(MPx) = W at the profit maximizing input level

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