Post Utme Caleb University 2017 Economics Question 30

Practice objective / multiple choice question 30 from the 2017 Post Utme Caleb University Economics examination.

Post Utme Caleb University 2017 Economics Objective / Multiple Choice
Question 30 POST_UTME_CALEB_UNIVERSITY • 2017 • ECONOMICS • objective

A firm is producing a good u\sing a production function of the form Q = 2L^0.5K^0.5. If the firm's output is 100 units, and the price of labor is $10 per unit, and the price of capital is $20 per unit, what is the likely outcome for the firm's profit?

Answer Options

Correct Answer A. The firm will experience a supernormal profit.
B. The firm will experience a normal profit.
C. The firm will experience a loss.
D. The firm will experience a loss, but the loss will be minimized.
Correct Answer
A
Correct Option:
The firm will experience a supernormal profit.

About This Question

This is Post Utme Caleb University 2017 Economics Question 30. It is one of the objective questions from the 2017 Post Utme Caleb University Economics examination.

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