Short run profit maximization example
Given the following information:
- $p=10$
- $w=15$ and $r=30$
- $f(K,L) = K^{1/4}L^{1/4}$
- $K=1$
How much labor should a firm hire to maximize profit? How much profit can it earn?
Try this on your own then watch the following video for a walkthrough.
Short run profit maximization example
Given the following information:
- $p=10$
- $w=15$ and $r=30$
- $f(K,L) = K^{1/4}L^{1/4}$
How much capital and labor should a firm hire to maximize profit? How much profit can it earn?
Try this on your own then watch the following video for a walkthrough.
Did you feel like any of the videos above were confusing, or could use more detail? If you're a student at Iowa State University, send me a quick note at mclancy@iastate.edu, referencing the video number and your issue, if applicable.