quantitative methods

timer Asked: Mar 20th, 2016

Question description

A competitive firm has the following production function : y=f (x) = 400x + 60x2 — 6x3 Where y= output, x = input. The firm faces an output price of P=10 and an input price of W = 5440. 

1.  Write a profit function of this firm in terms of output and input prices and the input level. 

2.  What is the profit maximising level of input for this firm ? Verify that the input level you choose is the profit maximising point. 

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

4. Verify that P(MPx)=W at the profit maximising input level. 

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