Managerial Econ.

Reasoning. Express your thoughts base on the problem indicated below. You can explain your answer in words or in mathematical form.

1.Suppose Firm A has a budget of P1.5 million pesos in outsourcing inputs, labor and machines, that would lend support in its 1 year operation. Suppose further that the cost of labor for 1 year is P150,000 and for a machine is P200,000. If it decides to hire 6 laborers, how many machines would it accept?

Problem Solving. Determine for what is asked. Show your solution legibly. Improper solution will not be credited.

1.Suppose the production function of a firm is given as:

Q = 5L + 10L² - 2L³

a. Find the number of labors that would yield maximum values of TP, AP, and MP?

b.Base on the results on "a", provide a range of values that would reflect the three stages of production.

2. Consider the following graphical presentation as the optimal combination of a firm:

Capital 10 IC Labor