Author Question: A company's monthly sales, in thousands, is given by S(x, y) = 7x0.8y0.3, where x is the amount ... (Read 59 times)

jeatrice · **on:** Jun 16, 2021

Question 1

A company has the following production function for a certain product:

p(x, y) = 30x^0.8y^0.2 .

Find the marginal productivity with fixed capital, p_y .
◦ 6

^0.2
◦ 6

^0.8
◦ 6

^0.8
◦ 6yx^0.8

Question 2

A company's monthly sales, in thousands, is given by S(x, y) = 7x^0.8y^0.3, where x is the amount spent on newspaper advertising per month in thousands of dollars and y is the amount spent on radio advertising per month in thousands of dollars. Suppose the company currently spends $4000 on newspaper advertising per month and $5000 on radio advertising per month. What would be the effect on sales if the company increases the amount spent on newspaper advertising to $5000, while the amount spent on radio advertising remains constant?
◦ Sales would increase by $13,410.71.
◦ Sales would decrease by $657.79.
◦ Sales would increase by $6577.87.
◦ Sales would increase by $2063.42.

zhanghao · **Reply #1 on:** Jun 16, 2021

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