Suppose a production function for a firm takes the following algebraic form: Q = (0.25)K × (1.5)L2,where Q is the output of garage doors produced per month.Now suppose the firm is operating with 10 units of capital (K = 10)and 8 units of labour (L = 8).What is the output of garage doors per month?
A)24
B)300
C)2400
D)240
E)3000

Question

Quizplus · Accepted Answer

Plug in K = 10 and L = 8 into the production function:
Q = (0.25)(10) × (1.5)(8)2
Q = 240
Thus, the firm is producing 240 garage doors per month. The answer is choice D.

Suppose a Production Function for a Firm Takes the Following