A firm only uses one input in its production function, labor (L = number of workers)...

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A firm only uses one input in its production function, labor (L = number of workers) to produce car rides (all the workers provide their own cars, gas, etc.). The firm's total revenue (TR) function is TR = 20L. The firm's total cost (TC) function is TC = 1² + wL where (w) is the wage. The first expression in the cost function is non-wage costs e.g., payroll processing costs, bonuses, health insurance subsidy etc., while the second expression is wage costs. a. (4 points) Write the firm's profit function (Note: the firm sells its rides for $1, so P = 1 in the profit function). b. (6 points) What is the firm's labor demand function as a function of the wage? (Hint: the firm chooses L to maximize profit, so will need to calculate the first order condition with respect to L.). A firm only uses one input in its production function, labor (L = number of workers) to produce car rides (all the workers provide their own cars, gas, etc.). The firm's total revenue (TR) function is TR = 20L. The firm's total cost (TC) function is TC = 1² + wL where (w) is the wage. The first expression in the cost function is non-wage costs e.g., payroll processing costs, bonuses, health insurance subsidy etc., while the second expression is wage costs. a. (4 points) Write the firm's profit function (Note: the firm sells its rides for $1, so P = 1 in the profit function). b. (6 points) What is the firm's labor demand function as a function of the wage? (Hint: the firm chooses L to maximize profit, so will need to calculate the first order condition with respect to L.).

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a The firms profit function is TR TC 20L 14L2 wL 20L 14L2 wL b To find ... View the full answer