00:01
So here we're talking about production.
00:02
We have q and i assume these are exponents to give us a cobb -douglas form.
00:06
Q to the half, l to the half.
00:07
We know that the price is equal to 20.
00:10
We know that the capital is fixed at 9.
00:14
And we know that the rental rate of capital is 2.
00:17
We know that the wage is 5 and we can choose the labor.
00:21
So what we want to do here is set up a profit function.
00:24
And the profit is the revenue, the price times quantity, minus our total cost.
00:30
And we can substitute in here.
00:32
The price is 20.
00:34
The quantity is going to be 9 to the half, l to the half, because we know that the production function says k equals 9...