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Assume that you have estimated that your firm's production function can be simplified to the following: Q = K^(1/3) * L^(2/3). You currently use 125
Assume that you have estimated that your firm's production function can be simplified to the following: Q = K^(1/3) * L^(2/3). You currently use 125 units of capital in the production process at a cost of $50 a unit. You can hire labor at a prevailing wage of $20 an hour. Lastly, you can sell your firm's product at a market price of $50 a unit. Assuming all else remains equal, what is your firm's profit-maximizing level of labor, output, and profit?
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