Exercise 3 [21 Points] A profit-maximizing firm produces a good X. Both the product and labor market are perfectly competitive. The production function is: X=f(L)= 4L0.5, L indicates the number of hours worked. a) Verbally define the concept value of the marginal product of labor" (VMP). [2 Points]

b) Derive the firm's demand function for hours worked L. [8 Points]

c) Calculate the profit-maximizing number of hours worked L, the profit-maximizing output X and the maximal profit , when the hourly wage rate is w=10 and the price for the produced output is p=10. [3 Points]

d) Sketch the demand function for hours worked L. Do not forget to label all the relevant values on the axes and in the diagram. [3 Points]

important notice ..... there is an empty diagram here with nothing written on it for you to sketch or respond to the question i could not draw it.....an x and y axis diagram ..... thank you.........for question d to be precise

e) Calculate, show graphically (use the diagram from d)), and verbally explain briefly how the optimal demand for hours worked L will change in response to a price increase from p=10 to p=20. (The hourly wage rate is still w=10.) [5 Points]