JTM Manufacturing Company Ltd's demand function is Q = 70 - 0.25P; Marginal Cost (MC) = 16Q, and Total Fixed Cost (TFC) is 22% of Total Revenue at the revenue maximising level.

Answer the following:

(i) Determine Average Fixed Cost (AFC) at the revenue maximizing level (Hint: revenue maximizing level of output occurs when MR = 0)

(ii) Derive the profit function for JTM Manufacturing Company Ltd, if Total Cost = 8Q2 + TFC.

XYZ national retail outlet recently hired you to estimate the firm's production function. Based on your research you have derived the following production function, Q = K0.5L 0.5. Assuming that capital is fixed at 1 unit,

answer the following: a. Calculate the average product of labor when 9 units of labor are utilized

b. Calculate the marginal product of labor when 9 units of labor are utilized. (HINT: Recall Marginal requires differential)

c. Assuming that capital is no longer fixed and that the company uses input rates of 50 and 50 for labor (L) and capital (K) respectively. If the price of labour and capital is $20 each, please state if there is efficiency in production.