Question: A production function is given as Q = 21L - 0.06L 2 . If each unit of output Q contributes $10 in revenue (sells for

  1. A production function is given as Q = 21L - 0.06L2.
  1. If each unit of output Q contributes $10 in revenue (sells for $10) and each labor unit costs $42 per hour, how many units of labor (L) should be hired to maximize profit?
  2. Given your answer to part c, what output (Q) will the firm produce?   
  3. Assuming no other cost than labor costs, what is the profit at this level of labor and output
  4. Suppose that the marginal revenue from the product is unchanged at $10, but that the cost of hiring labor increases to $54 per hour. How many labor units (L) will the firm employ?

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