Question: There are two different inputs in the production function, labor and capital. The production technology of a cellphone allows 3 workers to do the work
There are two different inputs in the production function, labor and capital. The production technology of a cellphone allows 3 workers to do the work of 1 robot machine. The company plans to produce 100 cellphones. The cost of capital is 750 yuan for one machine use per day. (1)If the daily salary each worker is 300 yuan, what combination of inputs will the firm use?
(2)What inputs will the firm use if the daily salary is 225 yuan?
(3)What is the elasticity of labor demand as the salary decreases from 300 to 225?
(4)Suppose the production technology changes to be combining 5 workers and 3 machines to produce 1 cellphone, the company has 15 machines and the salary drops from 200 yuan to 100 yuan, calculate the company's elasticity of demand for labor in the short run.
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