Suppose a production function for a firm takes the following algebraic form: Q = 2KL - (0.2)L2,where Q is the output of sweaters per day.Now suppose the firm is operating with 8 units of capital (K=8)and 10 units of labour (L=10).What is the output of sweaters?
A)155 sweaters per day
B)140 sweaters per day
C)60 sweaters per day
D)30 sweaters per day
E)80 sweaters per day

Question

Quizplus · Accepted Answer

Substitute K=8 and L=10 into the production function:
Q = 2KL - (0.2)L^2
Q = 2(8)(10) - (0.2)(10)^2
Q = 160 - 20
Q = 140
Therefore, the output of sweaters is 140 sweaters per day. The best choice is option B.

Suppose a Production Function for a Firm Takes the Following