20.1 (0) The short-run production function of a competitive firm is given by f(L) = 623/", where I is the amount of labor it uses. (For those who do not know calculus-if total output is aL', where a and b are constants, and where & is the amount of some factor of production, then the marginal product of L is given by the formula ab-1.) The cost per unit of labor is w = 6 and the price per unit of output is p = 3. (a) Plot a few points on the graph of this firm's production function and sketch the graph of the production function, using blue ink. Use black ink to draw the isoprofit line that passes through the point (0, 12), the isoprofit line that passes through (0, 8), and the isoprofit line that passes through the point (0,4). What is the slope of each of the isoprofit lines? . How many points on the isoprofit line through (0, 12) consist of input-output points that are actually pos- sible? J. Make a squiggly line over the part of the isoprofit line through (0, 4) that consists of outputs that are actually possible. (b) How many units of labor will the firm hire? How much output will it produce? If the firm has no other costs, how much will its total profits be? Output 48 36 24 12 4 B 12 16 20 24 Labour input(c) Suppose that the wage of labor falls to 4, and the price of output remains at p. On the graph, use red ink to draw the new isoprofit line for the firm that passes through its old choice of input and output. Will the firm increase its output at the new price? Explain why, referring to your diagram