1.What if you are the manager of Albany Blenders, Inc., a manufacturer of high-tech blenders, and the production process is approximated as Q = 2K^3/4 L^1/4, where K is capital equipment and L is labor. The company has already spent $7,200 on 16 units of capital equipment it owns and the workers are paid $35 per hour. Assume that the manufactured blenders can be competitively sold for $225 each.

(a)What is the profit-maximizing use of labor and capital? Clearly show the steps and calculations.

(b)What is the economic profit or loss? Clearly show the steps and calculations.

(c)Cobb-Douglas production function displays stage II of the production process only, and the marginal product of labor in the production process is the firm's demand for labor. What is the equation and curve of the firm's demand for labor? Clearly show the steps and calculations.

(d)Graphically illustrate and carefully discuss the relationships among marginal cost, the average variable cost, average total cost, and average fixed cost, when a firm could produce any level of output.