Question

A monopolist has a production function 27 (L-2)(K+1) Q(L,K) where L, Kis the amount of labor and capital. The wage rate is denoted by w and the rental rate of capital is denoted by r. The inverse demand function the monopolist is faced with is given by P = 12- 3Q where P is the market price and Q is the quantity sold. 13. Write down the optimization problem of the monopolist. 14. Write down the first order condition(s) 15. Find out the optimal amount of labour and capital. 16. Write down the second order condition(s) and check whether they are satisfied.

Answer 1

solved all 4 parts. if any doubt msg.
リル 2 Q 12 30 W Y C - WL P 12-3Q TR - 120-30 TR= TR 1 -T1 w 7 ATS k 0-123(1-2) minlwLk) (0-2 (L-2 13 min TL 「+ナ(-17で(tt) 7e (23) L-2) - L2 (L-2) K+ (2312-2) 4(e+リ wlL-2) K 4Y L-2 +4 - K WL-2h 4K+4 C WL yk. L k L-2 C WL y Wi-2W K 44 4 Y Y L- CEWL MZ- 1M Cと WL Y 2

C5wL Ww Y 2 4 A C SW L 2 % S 4 23 C+W ATG tY SW. WL-2W fr CtW 4 (6s)A 2 +y SW

Page No 二入(22) ()tL Yel tre -(2) (L-2 1 /CluG 22 (Kナリきと。 e