Question: Consider the following short - run production function ( where L = variable input labor hours; Q = output units produced ) : Q =
Consider the following shortrun production function where L variable input labor hours; Q output units produced:
QL L
Suppose that each unit of output can be sold for $ per unit. Also assume that the firm can obtain as much of the variable input L labor as it needs at $ per hour.
Determine the marginal revenue product function.
Determine the marginal factor cost function.
Determine the optimal value of L given that the objective is to maximize profits.
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