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.

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