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A firm uses labor (L) and capital (K) to produce output (q) according to the function: q=1/2 L 1/2 K In the short-run, the firm's
A firm uses labor (L) and capital (K) to produce output (q) according to the function: q=1/2 L1/2 K
In the short-run, the firm's level of capital is fixed at two units (K=2) and each unit of labor must be paid a wage of $3 (w=3). What must be the price (p) the firm can charge for each unit of output if the firm maximizes short-run profits by producing q=4 units of output?
a.) p = ? dollars
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