Consider the following short-run production function (where L = variable input, Q = output): Q = 10L

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Consider the following short-run production function (where L = variable input, Q = output):

Q = 10L − 0.5L2

Suppose that output can be sold for $10 per unit. Also assume that the firm can obtain as much of the variable input (L) as it needs at $20 per unit.

a. Determine the marginal revenue product function.

b. Determine the marginal factor cost function.

c. Determine the optimal value of L, given that the objective is to maximize profits.

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Managerial economics applications strategy and tactics

ISBN: 978-1439079232

12th Edition

Authors: James r. mcguigan, R. Charles Moyer, frederick h. deb harris

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Question Posted: Dec 03, 2012 02:24 AM

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Consider the following short-run production function (where L = variable input, Q = output): Q = 10L

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a Q 10L 5L 2 MP L 10 10L MR Q Price ...View the full answer

Managerial economics applications strategy and tactics

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