Question 31 of 31intermediate🔧 ApplyNumerical3 marks

Find out the maximum possible output for a firm with zero unit of LL and 10 units of KK when its production function is

Q=5L+2KQ = 5L + 2K
Correct Answer

The maximum possible output is 20 units.

Given:

  • Production function: Q = 5L + 2K
  • Labour (L) = 0 units
  • Capital (K) = 10 units

Calculation: Substituting the values in the production function: Q = 5L + 2K Q = 5(0) + 2(10) Q = 0 + 20 Q = 20 units

Therefore, the maximum possible output that the firm can produce with zero unit of L and 10 units of K is 20 units.

Exercise: EXERCISES | Q: 30 | (Page 17)
For More Understanding

Explanation

This is a straightforward application of the production function concept. The production function Q = f(L, K) tells us the maximum quantity of output that can be produced using different combinations of labour (L) and capital (K). In this linear production function Q = 5L + 2K, we simply substitute the given values of L = 0 and K = 10 to find the output. Since L is zero, the term 5L contributes nothing to output, and the entire output comes from the capital input through the term 2K = 2×102 \times 10 = 20.

Solution Steps

  1. Step 1: Identify the production function Q = 5L + 2K and given values L = 0, K = 10

  2. Step 2: Substitute L = 0 in the equation: Q = 5(0) + 2K = 0 + 2K = 2K

  3. Step 3: Substitute K = 10: Q = 2(10) = 20

  4. Step 4: Final answer: Maximum possible output = 20 units

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