Neco Model Questions Vol1 2020 Economics Question 38
Practice objective / multiple choice question 38 from the 2020 Neco Model Questions Vol1 Economics examination.
A firm uses the Cobb‑Douglas production function \(Q = K^{0.4}L^{0.6}\). Capital is fixed at \(K = 100\) units. The output price is \(p = \$20\) per unit, the wage rate is \(w = \$5\) per unit of labour, the rental rate of capital is \(r = \$2\) per unit of capital, and a specific tax of \(t = \$3\) is levied on each unit of output. Determine the labour input \(L\) (rounded to the nearest whole unit) that maximises the firm's profit.
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About This Question
This is Neco Model Questions Vol1 2020 Economics Question 38. It is one of the objective questions from the 2020 Neco Model Questions Vol1 Economics examination.
Difficulty level: Hard .
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