Question: Question 1 (7 marks):A monopolist has the following production function Q=[05×05 where Lis the number of units of labor and K is the number of units of capitalused in the production process. Suppose that the costper unit of labour is$2 and the cost per unit of capital is $18 and the monopolist takes theinput prices as given.See the answerSee the answerSee the answer done loadingQuestion 1 (7 marks):A monopolist has the following production function Q=[05×05 where Lis the number of units of labor and K is the number of units of capitalused in the production process. Suppose that the costper unit of labour is$2 and the cost per unit of capital is $18 and the monopolist takes theinput prices as given. Assume the market demand is P – 24 – Q.If the monopolist is going to maximise the profit, how much output willthey produce? How many units of labour and capital is the firm going toemploy? How much profit is the firm going to earn?please li…View the full answer
