Question
Rabelaisian Restaurants has a monopoly in the town of Upper Glutton. Its production function is Q = 10L, where L is the amount of labor
Rabelaisian Restaurants has a monopoly in the town of Upper Glutton. Its production function is Q = 10L, where L is the amount of labor it uses and Q is the number of meals produced. In order to hire L units of labor, Rabelaisian Restaurants must pay a wage of 10 + 0.1L per unit of labor. The demand curve for meals at Rabelaisian Restaurants is given by P = 41 - Q/1,000. The profit-maximizing output for Rabelaisian Restaurants is
a. 2,000 meals.
b. 20,000 meals.
c. 2,500 meals.
d. 10,000 meals.
e. 1,250 meals.
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