The production function is given by f(x)= 4x^1/2.If the price of the commodity produced is $100 per unit and the cost of the input is $15 per unit, how much profit will the firm make if it maximize profits? A)$2,666.67 B)$1,331.33 C)$5,337.33 D)$2,651.67 E)$1,336.33

Question

Quizplus · Accepted Answer

To maximize profit, set marginal revenue equal to marginal cost. The marginal product is f'(x) = 2x^(-1/2). Set 100 * 2x^(-1/2) = 15, solve for x to find the optimal input level. Calculate output, revenue, and subtract total cost to find profit.

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

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