The production function is given by f(x)=4x^1/2.If the price of the commodity produced is $60 per unit and the cost of the input is $10 per unit, how much profit will the firm make if it maximizes profits? A)$1,440 B)$718 C)$2,884 D)$1,425 E)$723

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Quizplus · Accepted Answer

To maximize profit, set marginal revenue equal to marginal cost. The marginal product is f'(x) = 2x^(-1/2). The revenue is 60f(x) and cost is 10x. Solving for x gives x = 36. Profit is 60f(36) - 10(36) = $1,440.

The Production Function Is Given by F(x)=4x1/2

The Production Function Is Given by F(x)=4x^1/2