A producer has a production function given by: y(l₁,l₂)= l₁^0.5+2l₂^0.5where y is the level of output and l₁and l₂
are two different types of labour that are employed. Their cost is w₁and w₂respectively.
a)Suppose that the input prices are both equal to w and that the output sells at price p. What is the optimal employment of two types of labour as a function of p and w?
b)Suppose that p=10, w=5. What is the optimal quantity of output produced? What is the corresponding profit?
c)What returns to scale does the production function exhibit?

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The Answer of A producer has a production function given by: y(l₁,l₂)= l₁^0.5+2l₂^0.5where y is the level of output and l₁and l₂ are two different types of labour that are employed. Their cost is w₁and w₂respectively. a)Suppose that the input prices are both equal to w and that the output sells at price p. What is the optimal employment of two types of labour as a function of p and w? b)Suppose that p=10, w=5. What is the optimal quantity of output produced? What is the corresponding profit? c)What returns to scale does the production function exhibit?

A Producer Has a Production Function Given By: Y(l1,l2)= L10

A Producer Has a Production Function Given By: Y(l₁,l₂)= L₁⁰