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A production function is given as Q = 21L - 0.06L 2 . If each unit of output Q contributes $10 in revenue (sells for
- A production function is given as Q = 21L - 0.06L2.
- If each unit of output Q contributes $10 in revenue (sells for $10) and each labor unit costs $42 per hour, how many units of labor (L) should be hired to maximize profit?
- Given your answer to part c, what output (Q) will the firm produce?
- Assuming no other cost than labor costs, what is the profit at this level of labor and output
- Suppose that the marginal revenue from the product is unchanged at $10, but that the cost of hiring labor increases to $54 per hour. How many labor units (L) will the firm employ?
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Microeconomics An Intuitive Approach with Calculus
Authors: Thomas Nechyba
1st edition
538453257, 978-0538453257
