Question: Consider the following short-run production function: =-0.5L^2 + 10L. Suppose that the output of the firm can be sold at a price of $10. Also

Consider the following short-run production

Consider the following short-run production function: =-0.5L^2 + 10L. Suppose that the output of the firm can be sold at a price of $10. Also suppose that labor can be hired for $20. a) Find the marginal revenue product function. b) Find the amount of labor that should be hired to maximize short run profits. C) Suppose that the productivity of your workers increases. What happens to the demand for labor hours? For illustration, suppose that the productivity increase changes the short run production function to = -0.5L^2 + 12L. Find how many workers are hired now

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!

Case Study Suppose that you are the consultant hired by a manufacturing company to design a suitable inventory management strategy for its Alloy #1 products for determining the weekly production...

Consider the following short-run production function: =-0.5L^2 + 10L. Suppose that the output of the firm can be sold at a price of $10. Also suppose that labor can be hired for $20. a) Find the...

Production Costs Analysis Assignment Total: 20 points 1. A firm has $60 xed costs and variable costs as indicated in the table below. Complete the table: Quantity Total Total Average Average . gamut...

Consider the following short - run production function ( where L = variable input, Q = output ) : Q = 6 L 0 . 4 L 2 Q = 6 L 0 . 4 L 2 Suppose that output can be sold for $ 1 0 per unit. Also assume...

16. Consider the following (short-run) production function relating labor input to output. Note that the firm has fixed inputs, for which it pays $30 regardless of the output level. Output Labor...

Consider the following short-run production function (where L- labour, Q-output): Q = 10L - 0.5L-2 Suppose that output can be sold for $10 per unit. Also assume that the firm can obtain as much of...

. Explain the following attachments 1. What does a positive linear relationship between x and y in a simple regression imply? (a) Increases in the independent variable are usually accompanied by...

Consider the following short-run production function (where L- labour, Q-output): Q = 10L - 0.5L-2 Suppose that output can be sold for $10 per unit. Also assume that the firm can obtain as much of...

At the start of 2071 Cowboy Corp. purchased 25% of Bebop Tech Inc. for $45 million. At the time of purchase, the carrying value of Bebop Tech's net assets was $75 million. The fair value of Bebop...

The following is a crude but effective method for estimating the order of magnitude of Avogadro's number using stearic acid (C18H36O2). When stearic acid is added to water, its molecules collect at...

Once an auditor has determined that accounts receivable at year - end have increased due to slow collections in a tight money' environment, the auditor would be likely to: Question 7 Select one: A ....

Read the articles on journaling and review the template provided. Identify what approach, to journaling, in the articles you found useful and why. Post to the discussion forum that you have reviewed...