Answer to Question #185470 in Microeconomics for Ishaq Mubarak

Question

suppose capital (k) and labour (L) are the only inputs of production with r(=12ghc) and w(=10) as the respective reward.

a. Derive the total cost function. Tc = 10k + 2L

TC = p*q

b. Derive the total revenue function if q=2Lk-k²-3L²+3k

c. Derive the profit function.

Answer 1

a)total cost function

Reward for capital $(k) = r(=12ghc)$

reward for labour $(L) = W9=10)$

Total cost function, $TC=12K+10L$

b)

Total revenue function

$q=2LK-K^2-3L^2+3K$

$TR=p\times q$

$=(2LK-K^2-3L^2+3K)p$

$=2LKP-K^2P-3L^2P+3KP$

c)

profit$=TR-TC$

$=(2LKP-K^2P-3L^2P+3KP)-(12K+10L)$

$=2LKP-K^2P-3L^2P+3KP-12K-10L$