Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A firm can manufacture a product according to the production function: Q=FIK.L) = K3/4 1/4 a. Calculate the average product of labor, APL, when the

A firm can manufacture a product according to the production function: Q=FIK.L) = K3/4 1/4 a. Calculate the average product of labor, APL, when the level of capital is fixed at 81 units and the firm uses 16 units of labor. Instruction: Round your responses to 3 decimal places. What is the average product of labor when the firm uses 256 units of labor? b. Find an expression for the marginal product of labor, MPL, when the amount of capital is fixed at 81 units. Instruction: The second response is the exponent on L in the expression. Round your responses to 2 decimal places. MPL Then, illustrate that the marginal product of labor depends on the amount of labor hired by calculating the marginal product of labor for 16 and 81 units of labor. Instruction: Round your responses to 3 decimal places. MPL when L 16: MPL when L 81: c. Suppose capital is fixed at 81 units. If the firm can sell its output at a price of $200 per unit and can hire labor at $50 per unit, how many units of labor should the firm hire in order to maximize profits? What is the average product of labor when the firm uses 256 units of labor? b. Find an expression for the marginal product of labor, MPL, when the amount of capital is fixed at 81 units. Instruction: The second response is the exponent on L in the expression. Round your responses to 2 decimal places. MPL Then, illustrate that the marginal product of labor depends on the amount of labor hired by calculating the marginal product of labor for 16 and 81 units of labor. Instruction: Round your responses to 3 decimal places. MPL when L-16: MPL when L 81: [ c. Suppose capital is fixed at 81 units. If the firm can sell its output at a price of $200 per unit and can hire labor at $50 per unit, how many units of labor should the firm hire in order to maximize profits? Instruction: Enter your response as a whole number

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Statement Analysis Accounting Ratio Analysis

Authors: Commerce Central

1st Edition

979-8862220773

More Books

Students also viewed these Accounting questions