Jawbats produces wooden baseball bats used by professional athletes. Jawbatss short-run production function is given by Q=

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Jawbats produces wooden baseball bats used by professional athletes. Jawbats’s short-run production function is given by Q= 2L0.5. The associated marginal product of labor is MPL= 1/L0.5.

a. If the inverse demand for Jawbats’s bats is P = 100 - 0.5Q, find the marginal revenue product of labor.

b. Jawbats can hire workers for $18 per hour. How many workers should Jawbats hire?

c. What will Jawbats bats sell for in the market? How many will Jawbats sell?

d. Show that hiring one more worker beyond the optimal level you found in (b) will be bad for Jawbats.

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Microeconomics

ISBN: 9781319105563

3rd Edition

Authors: Austan Goolsbee, Steven Levitt, Chad Syverson

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