Answer to Question #73903 in Microeconomics for Zulfiqar Ali
The Economic Planning Department of Haryana Chemicals Ltd. has used regression analysis to estimate the firm's production function as In Q = 3 + 0.25 In K + 0.75 In L where "In" denotes the natural logarithm of the variable.
a. Convert this production back to its original (i.e., multiplicative or Cobb- Douglas) form( HINT: find the antilogarithm of both sides of the equation).
b. if the capital stock is fixed at 16, the price of labour is Rs. 200 per unit, and the price of the firm's only product, sulfuric acid, is Rs.10 per unit, determine the rate of labor input that will maximize the firm's profit.
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