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A restaurant owner has the following short-run production function: Q = 50L + 6L 2 - 0.5L 3 where Q = number of meals served
A restaurant owner has the following short-run production function: Q = 50L + 6L2 - 0.5L3
where Q = number of meals served per day, and L = number of workers.
a) Determine the short run maximum output that the owner can produce.
b) Calculate the output at which the average product is maximum.
c) Identify the efficient stage to hire labor.
d) If workers can be hired for $40 per day and the average meal is $6, how many workers should be hired?
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