Which of the following profit functions exhibits a linear production function? A)$\pi$ = P x K^0.75L^0.50 - 20L - 35K. B)$\pi$ = P x min(2L, 5K) - 20L - 35K. C)$\pi$ = P x (3K + 4L) - 20L - 35K. D)$\pi$ = P x (3K^0.5 + 4L^0.5)^1/0.2 - 20L - 35K.

Question

Quizplus · Accepted Answer

A linear production function is characterized by a linear relationship between inputs and outputs. Option C has a linear combination of inputs (3K + 4L), indicating a linear production function.

Which of the Following Profit Functions Exhibits a Linear Production π\piπ

Which of the Following Profit Functions Exhibits a Linear Production $\pi$