The firm's profit maximization problem is:
A) max $\pi$ = F(r, w)- rK -wL
{r, w}.
B) max $\pi$ = rK + wL - F(K, L)
{K, L}.
C) max $\pi$ = F(K, L) - rK - wL
{r, w}.
D) max $\pi$ = F(K, L) - rK - wL
{K, L}.
E) All of these answers are correct.

Question

The firm's profit maximization problem is:
A) max  $\pi$ = F(r, w)- rK -wL
{r, w}.
B) max  $\pi$ = rK + wL - F(K, L)
{K, L}.
C) max  $\pi$ = F(K, L) - rK - wL
{r, w}.
D) max  $\pi$ = F(K, L) - rK - wL
{K, L}.
E) All of these answers are correct.

Quizplus · Accepted Answer

The correct choice is D because it represents the firm's profit maximization problem accurately: maximizing profits (π) by choosing the optimal levels of capital (K) and labor (L) to maximize the difference between total revenue (F(K, L)) and total costs (rK + wL), where r is the cost of capital and w is the wage rate.

The Firm's Profit Maximization Problem Is: A) Max π\piπ = F(r, W)- RK -WL {R, W}

The Firm's Profit Maximization Problem Is:
A) Max $\pi$ = F(r, W)- RK -WL
{R, W}