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Maximizing levels of employment and output

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Reference no: EM131709375

A firm with q=K1/2L1/2 sells output at p=8 and hires inputs at w=1 and r=4. Short run K=4.

a) Derive the firms TPL Curve

b) Provide an isoprofit analysis to illustrate and quantify the firms maximizing levels of employment and output

c) On the same diagram, illustrate and quantify how this firm would behave if the price of output declined to 2.

Reference no: EM131709375

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