A firm can allocate its labour force between two factories that produce two different goods. The...
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A firm can allocate its labour force between two factories that produce two different goods. The production function of the first factory, which produces good A, is q = √L. The production function of the second factory, which produces good B, is q = 2√L. The firm can sell q units of good A at a price of PA = 15-9A and they can sell qa units of good B at a price of Pa = 30 -2q. The firm has a total labour force of L=100 available. (a) How much revenue does the firm earn if they allocate , units of labour to the first factory and the remaining Lg units to the other factory? 5 marks (b) What constraint is the firm facing? 2 marks A firm can allocate its labour force between two factories that produce two different goods. The production function of the first factory, which produces good A, is q = √L. The production function of the second factory, which produces good B, is q = 2√L. The firm can sell q units of good A at a price of PA = 15-9A and they can sell qa units of good B at a price of Pa = 30 -2q. The firm has a total labour force of L=100 available. (a) How much revenue does the firm earn if they allocate , units of labour to the first factory and the remaining Lg units to the other factory? 5 marks (b) What constraint is the firm facing? 2 marks
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a ANSWER The firm earns a total revenue of 43024 415q1 120 60 4q... View the full answer
Related Book For
Consumer Behavior Buying, Having and Being
ISBN: 978-0134129938
12th Global Edition
Authors: Michael R. Solomon
Posted Date:
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