Which of the following conditions are satisfied for a rational firm to achieve its equilibrium by maximising Q = f(L.K) subject to C = wL + rK.
(A) \(\frac{\frac{\partial Q}{\partial L}} {\frac{\partial Q}{\partial k}} =\frac{w}{r}\)
(B) \(\frac{\partial ^2Q}{\partial L^2}>0, \frac{\partial ^2Q}{\partial K^2}>0\)
(c) \(\frac{\partial ^2Q}{\partial L^2}<0, \rm \ and \ \frac{\partial ^2Q}{\partial K^2}>0\)
(D) \(\frac{\partial ^2Q}{\partial L^2}<0, \rm \ and \ \frac{\partial ^2Q}{\partial K^2}<0\)
(E) \(\left( \frac{\partial ^2Q}{\partial L^2} \right) \left( \frac{\partial ^2Q}{\partial K^2} \right)> \left( \frac{\partial ^2Q}{\partial L \partial K} \right) ^2\)
Choose the correct answer from the options given below:
1
(A), (B) and (E) only
2
(A), (D) and (E) only
3
(A) and (E) only
4
(A) and (B) only