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Question
Let the production function of a firm be `Q=5L^(1/2)K^(1/2)`.
Find out the maximum possible output that the firm can produce with 100 units of L and 100 units of K.
Solution
`Q=5L^(1/2)K^(1/2)................(1)`
L = 100 units of labour
K = 100 units of capital
Putting these values in equation (1)
`Q = 5(100)^(1/2)(100)^(1/2)`
= 5(10)(10)
= 500 units
Thus, the maximum possible output that he firm can produce is 500 units.
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